Simon Read: The cheerless Budget really doesn't matter
Saturday 27 March 2010
There was very little to cheer in this week's Budget. Even the good news for savers that ISA limits will increase annually by the inflation rate was tempered by the fact that the increase works out as an extra tax-free benefit of a paltry 76p a year, as Andrew Hagger explains on page 68.
And, while the raising of the stamp duty threshold to £250,000 for first-time buyers may help some people clamber on to the housing ladder, it excludes anyone who has owned a property before. That means people who may have sold up years ago and are now thinking of returning will be penalised, as will couples planning to buy their first home together if either already owns a flat or has owned or part-owned one before.
Even the Robin Hood element in the Budget was disappointing. The Chancellor said he would claw back the revenue lost from the higher stamp duty threshold from well-heeled homeowners selling property for more than £1m but, disappointingly, that change won't come into force for another 12 months.
But does it really matter in an election year? The chances are that a new government will want to set its own Budget, which could mean going through the whole process again in a matter of weeks. If that does turn out to be the case, I hope there is more positive news for ordinary folk.
* There has been little positive news for ordinary folk from the tax office because – shockingly – almost half of the calls to HM Revenue & Customs go unanswered. According to a report by the Commons Public Accounts Committee, almost 45 million calls from the public seeking help on tax and benefits went unanswered last year, and even those that did get through may have been given incorrect advice, the report warned.
Clearly, HMRC needs to do better, especially as it has been trying to save money by encouraging taxpayers to sort things out over the phone or by internet, rather than through letters or in person. With hundreds of thousands of people being sent the wrong tax code this spring, the Revenue seems to have failed to learn from previous disasters such as the widescale tax credit overpayments in the past decade. Part of the problem, of course, is the overly complicated tax system which even HMRC staff have difficulty fathoming. One solution could be a simpler tax and benefits system, which could be a priority for whichever party finds itself in office after the election.
* The City watchdog swooped on a further seven City professionals this week in its latest crackdown on insider dealing. The Financial Services Authority, in conjunction with the Serious Organised Crime Agency, arrested senior workers from respected City firms such as Deutsche Bank, Moore Capital and BNP Paribas. It was the FSA's fifth set of arrests and the biggest yet, but there are likely to be more to come. The practice of insider dealing is still widespread in the City and, with only five jail sentences handed down to those guilty of it, many seem to presume they can simply continue to get away with it. Let's hope they don't as the crackdown continues.
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