It’s that time of year again when guesswork about this year’s Budget becomes rife. Needless to say, I do have my own ideas what should be done in this year’s Budget, but right now I am indulging in a little well-informed and thoroughly research speculation over what George Osborne will do.
Firstly, I have to stress that I do not endorse any of these measures in any way. I hope that is clear from what I have written.
Millionaires’ tax break
We all know that Osborne will immorally slash the top rate of tax from 50% to 45%. And that’s not even for dividends. Dividends will be reduced from 42.5% to 37.5%.
But that includes a tax credit for tax that the company has paid, so it’s actually being reduced to 27.5% which is 22.5% less than 50%.
Also, the Chancellor has now realised that not all millionaires have annual income over a million pounds. This is thanks to sociopathic tax advisers pointing out the glaring flaw in Ed Miliband’s £40,000 cheque claim.
So to ensure that these ‘forgotten millionaires’ get the tax break they don’t deserve, George Osborne will actually write a cheque for £40,000 to all people with assets over one million pounds.
This has seen some perverse planning where many women have forced their husbands to sign over substantial assets whilst taking on all liabilities. This is to get the woman over the £1m threshold.
But I doubt that this will be considered in its equality impact.
The GAAR will be rubbish. Intentionally.
If George Osborne wanted to stamp out tax avoidance (like I did last year) then he would enact my GRAPIST which would allow HMRC to change any taxpayer’s lability to anything they think might be reasonable.
The GAAR panel won’t work because all the so-called “tax experts” on the panel keep disagreeing with me about my unquestionable knowledge if the tax system. This means that the GAAR panel will waste my precious time bickering over things until they concede to my way of thinking.
Also, I anticipate we won’t see any targeted anti-avoidance measures closing down the loopholes introduced by the big neoliberal accountancy firms. So we won’t see the patent box avoidance scheme closed nor the R&D tax relief scheme used by Rolls-Royce.
Not only is that disappointing, it is morally repugnant.
Statutory residence test
This is yet another disappointment.
The acid test is whether it will make Sir Phillip Green’s wife resident for tax purposes. It doesn’t so it must be truly awful.
What’s really bad about it is that it provides certainty for tax avoiders so they know they can come to the UK for a certain number of days without being liable to tax.
So we’ll have billionaires coming over here splashing around their dirty cash knowing that they can spend almost half of the year here before we can tax them on all their worldwide income.
I’d like to see everyone made resident the second they enter the UK. But I might expand on that in my own Budget release next week.
Pension and gift aid relief
I have long argued that the higher rate relief given on pension contributions and gift aid donations is immoral. Rich people shouldn’t have this ridiculous incentive to give money to charity or provide for their own retirements.
The neoliberals who argue with me on this point often say that the principle is that pension contributions and gift aid donations are intended to be made out of pre-tax income and that payroll giving schemes and employers’ pension contributions like those for the NHS effectively do this anyway. The basic rate band extension for the gross amounts of these contributions or donations provides a level playing field.
Well, that is an absurd argument and we should dismiss it altogether. Tax pays for road gritting and other important things like that. So it is a moral matter rather than a legal one.
Basic rate band extension is now widely acknowledged to be immoral so we should stop it.
Pay freeze for all civil servants
George Osborne will say that he will freeze all civil servant pay “for all eternity” so that The State ultimately withers and dies. This is part of his neoliberal ideology which has underpinned the Tories’ economic reform.
I have asked for confirmation that Labour would repeal this policy when they enter office, but Ed Balls has not responded to my email yet.
Mansion tax relief
It is now common knowledge that Osborne has tricked Nick Clegg into agreeing this one. Mansions (defined as properties worth over £2m and owned by somebody with a title) will become eligible for capital allowances that can be offset against general income.
These will be a straight-line 25% writing down allowance that means full tax relief will be received by the mansion-dweller within four years.
Anybody with a title less than Baron will not be allowed to claim the relief. Foreign equivalents from within the EU will be allowed and also, by concession, anybody from the US who can be described as a ‘tycoon’.
In a knee-jerk response to the Jimmy Savile scandal, Osborne is planning to charge a tax on tracksuit manufacturers in a similar fashion to the banker’s levy.
Nick Clegg’s jewellery tax idea had the same objective but was considered to be unwieldy to implement and too politically damaging. It was found to be incredibly unpopular with female voters of all ages and Mr T.
The tracksuit tax is simply a gimmicky political gesture to appease the city rather than an attempt at an actual revenue raising measure.
My main concern is that this will disproportionately hit Northerners.
Tax credits and universal credit
The universal credit system will be highly flawed, unlike the tax credit system which was designed to be fraud-proof and impossible to game. The universal credit system will create unfair rates of taxation on medium earners, unlike tax credits which would top out somewhere just over 100%.
The Budget will hammer the poorest hardest and give rich people enough money to go abroad for a couple more weeks. This will help them avoid even more tax by allowing them to spend their holiday money in tax havens and on duty-free.
I think we can say with absolute certainty that this Budget is an ideological attack on the NHS, the poor, genuine charities, the NHS, puppies, honesty, hard-working families, strivers, the NHS and children everywhere.
I don’t recommend it to The House.