Economic Stability Perhaps, but No Clear Vision for Tax Policy
Herring, Stephen, The Independent (London, England)
THE CHANCELLOR managed to avoid the word election in his 49- minute speech but it was clearly at the forefront of his mind as he revealed measures to reduce the tax burden for pensioners and families; both groups he has identified as key in the forthcoming general election. No doubt the younger elector, not moving house, without children who received nothing of note from this Budget is expected to focus on the presumed advantages children and old age will bring.
There are two of the Chancellor's particular measures which require comment. One of these is to be welcomed and one to be regretted.
I am pleased Gordon Brown has accepted many of the responses to the consultation exercise started in the Pre-Budget Report and has introduced a reasonably flexible 100 per cent capital allowance for the renovation of business premises in disadvantaged areas. This could make a real contribution to business regeneration across the country. We are not sure why the renovated business premises need to have been empty for 12 months. Surely the sooner the relief becomes available, and the work commences, the better?
But I regret removal of the exemption from the 4 per cent stamp duty land tax on commercial properties in disadvantaged areas. This appears to contradict the renovation relief. Many real estate investors and commercial property occupiers will be in a state of shock because the SDLT exemption was introduced only in December 2003 and, being an immediate change, some transactions are no longer viable unless a binding contract is already in place.
Many businesses will have to reconsider their plans and will have incurred abortive legal and professional fees. Hopefully, the Chancellor will reflect during the course of the Finance Bill debates on whether such a U-turn within 16 months is really the way to promote business stability.
Mr Brown claimed the reason he was able to afford the new measures was due to the benefits of his determination to maintain Britain's economic stability and growth. Whilst the underlying statistics that were quoted by the Chancellor were indeed impressive, including 50 consecutive quarters of economic growth and the lowest average levels of inflation and interest rates for more than 30 years, people running businesses may believe the Chancellor continues to give them a hard time …
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Publication information: Article title: Economic Stability Perhaps, but No Clear Vision for Tax Policy. Contributors: Herring, Stephen - Author. Newspaper title: The Independent (London, England). Publication date: March 17, 2005. Page number: 18. © 2009 The Independent - London. Provided by ProQuest LLC. All Rights Reserved.