The Chancellor’s rabbit out of the hat – a magical performance?
20 March 2013
Chris Sanger, EY’s global head of tax policy, comments on the Chancellor’s Budget:
“In a very combative Budget speech in the House of Commons, with the Shadow Chancellor being admonished for not listening quietly, George Osborne started his speech by saying he was going to focus on those people saving for retirement and running a business. With so little to play with, the Red Book listed 24 measures that had been previously announced and added a further 41.
“The Chancellor’s “rabbit out of the hat” was the new £2,000 Employment Allowance which, costing £ 1 ¾ billion per annum by the end of the forecast period, obscured the other pro-business cut in corporate tax rate to 20% and even the achievement of the £10,000 personal tax allowance for 2014.
“With almost £5 billion being raised from tackling avoidance and collecting tax debts, the overall cost of the policy decisions is broadly neutral for the fiscal finances. Given the constraints on the economy, the Chancellor may well feel that that was a magical performance.”