From a tax point of view, this is one of the most vicious – and possibly silliest – budgets for many years.
How can one reduce corporation tax to encourage businesses to come to the UK and at the same time impose worldwide taxation on the executives of foreign businesses once they have run their UK subsidiary for 15 years?
How can someone who claims to understand business see the purchase of a business rather than the company that operates it to avoid taking on hidden liabilities as a tax avoidance device? Yet, that is the reason for denying tax relief for the cost of goodwill. Other strange decisions are the reduction of tax relief for interest on buy-to-let properties but phasing it in over a period.
Either buy-to-let is a good thing because it provides housing or it is a bad thing because the massive tax advantages make it impossible for first-time buyers to compete with buy-to-let landlords. Phasing in the tax reduction over a long period is really saying the Chancellor is not sure, which is a bad basis for structural changes. The change in the basis of taxing dividends may be good news for big businesses, but will mainly hit the small entrepreneurial businesses that the Chancellor pretends that he wants to encourage. The proposals for direct recovery of tax debts have generated almost universal criticism but that has simply rolled off of the Chancellor’s back.