The Government likes to listen to the public's view on what should or shouldn't be in the Budget on March 19th and one can even imagine a reality TV show taking place in which viewers vote on what taxes should go up and which should go down. We can hear the compere now speculating on what the rate of Corporation Tax should be and then revealing what "our survey said".
In a timely and interesting exercise, a leading firm of London accountants have recently completed just such a survey of their own with input from nearly 300 respondents. This revealed some fairly predictable replies but also some that fly in the face of what the media purports to be accepted public opinion.
Asked what George Osborne should prioritise in his forthcoming budget, the highest number (35 %) not surprisingly opted for a squeeze on multinational corporations who pay little or no corporate taxes in the UK. While it is difficult to find anyone who is not in favour of global giants like Google, Amazon and Starbucks paying a lot more tax in those countries where their profits are actually earned, this is an issue which the Chancellor may have to keep on the back burner until a co-ordinated approach currently being prepared by all the OECD nations can be agreed. This is because the principal method that these behemoths use to minimise tax payments is to transfer of profits from one tax jurisdiction to others where corporate taxes are either negligible or non-existent.
Since a further 22% of respondents favoured a crackdown on tax evaders dodging UK tax with the help of offshore tax havens, it is clear that a total of 57% feel it is most urgent that the Coalition backs up its fairness mantra by ensuring that those individuals and corporations at the top of the pile pay their proper share.
Interestingly, nearly a quarter of those surveyed (23%) opted for a reduction in Employers' National Insurance on the basis that it would do much to boost the number of full time jobs. As there has been much talk recently about raising the Minimum Wage to something which more closely resembles a living wage, one could speculate whether the Chancellor might do something on National Insurance as a quid pro quo for employers raising wages for the lowest earners.
Rather surprisingly, a full 15% identified their priority as a cut in VAT for restaurants and tourist attractions on the basis that both are labour intensive and could provide many more job opportunities. The recent climate of austerity has resulted in many more people choosing to stay at home and heat up Vat free supermarket "meal deals" rather than eat out at a restaurant. However, anecdotal evidence suggests that, as the recovery gains traction, the restaurant trade is already experiencing an upturn in business anyway.
Finally, despite all the emphasis that the Labour Party puts on it, a return to 50% as the additional Income Tax rate for those earning over £150,000 is viewed as the main priority by only 6% of those canvassed. This may be because the people surveyed represented informed opinion rather than those influenced by simple demagoguery. The former would realise that a re-instated 50% rate might actually raise less revenue than the current 45% rate.
On Wednesday March 19th a number of Budget 2014 events are being hosted across the UK, to help businesses:
• review the measures announced
• help you interpret what these mean for you
•and have the ability to ask questions from experts
For more information and to book your Budget 2014 place, visit www.bakertilly.co.uk/budget2014