Rabbits? I didn’t even know he still had the hat

For a Chancellor with no money to distribute and an economy which continues to struggle to recover from the shocks it has suffered in recent years, Mr Osborne seems to have been surprisingly generous (though of course, as for any Chancellor, “surprisingly generous” means “seizing a little less of our money than he might have done”).

The £2,000 “employment allowance” (effectively a rebate of Employers’ National Insurance) to be introduced from April 2014 is a very welcome lifting, in a small way, of the taxes which successive governments have mystifyingly heaped on job creation. And the first small steps are to be taken towards encouraging employee ownership of shares, first by the proposed relief from CGT for selling shares to employees and second by allowing a company to give an employee £2,000’s worth of shares tax-free. These moves will particularly benefit smaller companies; coupled with the CGT reliefs for Enterprise Management Incentive shares and the exemption from CGT of up to £50,000 of gains on “employee shareholder” shares already announced it is increasingly attractive for employees to hold shares in their employer company.

There has been an unwelcome move on the IHT front with the countering of arrangements to mitigate IHT by taking out deductible loans to invest in non-taxable assets: much IHT planning will now need to be revisited. Coupled with the fixing of the nil rate band at £325,000 until 2018, IHT is becoming a problem for more and more people. Also on the tax planning front, tax mitigation using partnerships has come under HMRC’s gaze: the immediate change is that loans which close companies make to some partnerships after today will fall within the scope of a tax charge which previously applied only to loans to individuals: and, separately, HMRC have announced “consultation” on the taxation of partnerships, focussing particularly, it seems, on mixed partnerships of companies and individuals and on LLPs where some or all of the members have the look of employees.

For individuals, the increase in the personal allowance to £10,000 (from April 2014) is useful though, as has generally been the case in recent years, much of the benefit is removed for higher-rate taxpayers by the lowering of the threshold at which higher-rate tax becomes payable.

Changes already announced ahead of the budget include the unholy trio of measures targeting ownership of expensive homes through companies, namely the annual ownership charge, the penal 15% rate of SDLT and the charge to CGT on resident and non-resident corporate owners alike; the budget announces some minor changes which have resulted from consultation. Similarly, Finance Act 2013 will finally enact after a long gestation period the statutory residence rules for individuals, again subject to changes which have emerged in the course of consultation.

Much of the budget’s thunder was stolen by the announcement on the previous day of new rules on government support for childcare. Controversially, having taken excruciating care to ensure that Child Benefit was recouped from any household with an earner on more than £60,000, childcare support may potentially be available even to households with income of £300,000. On the other hand, single-earner “traditional” families who felt kicked in the teeth over the Child Benefit reforms may feel that Mr Osborne has aimed about three feet lower with the childcare proposals.

Mr Osborne has introduced a “Help-to-Buy” scheme (no doubt deliberately so styled in homage to the “Right-to-Buy” of the Thatcher era) which promises interest-free loans of up to 20% of the value of new-build properties and bank guarantees underpinning £130 billion of new mortgage lending for three years from 2014. No doubt this will be popular with prospective home-owners including those “moving up”: but perhaps even more so with developers and property investors who will be reassured that the measure should be effective in ensuring that UK property prices continue to defy gravity…

And all of this to be financed by further economies in public expenditure. Let’s hope he’s got his arithmetic right.



Sam Inkersole

In 2022, Sam won the Taxation’s Rising Star award at the Taxation Awards in and was named in the Accountancy Age 35 Under 35.

Jon Wedge

While Jon’s client work focuses on the financial services sector, he also oversees the firm’s assurance service, as well as supporting the trainees following in his footsteps.


Elana joined us in 2017 as an ACA trainee, after graduating from Durham University where she had studied languages. She is now a manager in our assurance team.


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