Tax and the current political situation

 In Analysis, Information, Tax

As I write these words, I have just heard that we are going to have a General Election on 12th December 2019.  I was listening to the Today Programme on Radio 4 in which someone from the CBI, and a business owner, were being interviewed as to the business climate of today.  The interviewer said to the business owner, “Who would you like to be in power”.  The business owner replied “Nobody really”, and then hastily backtracked as she realised what she had said.  I think her sentiments probably chime in with those of a great many people today.

 

In any event, the Budget which we would normally have this Autumn has been cancelled. Draft legislation for the Finance Bill was issued in July and the closing date for comment on the legislation was 5 September 2019. Due to the attempt on 9 September to prorogue Parliament, and other factors, there has been no response to the draft legislation.

What kind of Budget we may have, and how many of the Government’s tax proposals may be in it, is anyone’s guess. We cannot under present legislation dispense with a Budget because it is needed to set tax rates for 2020/21.

It is possible that the proposals for the application of the new IR35 Regulations to the private sector may not become law.  In case they do, I intend to publish some guidance in the next few days as to how IR35 works and what you have to be aware of if you operate your own Company with no staff.

I have steered clear of anything political until now, but I feel I should now take the opportunity to come off the fence.

In my view, when the Referendum was called as to whether we would remain in the EU or leave it, the Government put the cart before the horse.  They should have put before us, as far as possible, some kind of an outline of how we would relate to the rest of the world, and vice versa, if we did leave the European Union.

What would our role be in the world?  Would be just be an unimportant spear carrier for the United States, as some commentators think, or would we be more than that?  What kind of business relationships would we be able to forge with the rest of the world and indeed with the rest of Europe, and how easy or difficult would it be to carry on doing business and earning our normal living in a world in which we are no longer part of a European Union? Once we had in our possession at least an outline of an answer to these questions, we could have then had a referendum and the vote could had been based on something.

In the event, the vote was based on nothing.  We were given all kinds of competing promises by the Remain and Leave camps, all of which were mere speculation. They were no more susceptible to external verification than the claims by religion of eternal life for the believers.

Indeed, the referendum campaign came to resemble a religious argument. You were either one of the true believers, or else you were outside the pale and therefore due to be sent off to some place of weeping, wailing, and gnashing of teeth.  As time has gone on, evangelical beliefs as to the consequences of remaining in the EU or leaving it have become more extreme, and not less.

Now that we are beginning to see what the choices are in reality, I would now hold another referendum. I hope that would be the last referendum ever in the United Kingdom as I do not think they give reliable results for decision making. Parliament has to make its mind up.

– By Stephen Handley, FCCA

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