Chancellor George Osborne will have little room for manoeuvre when he delivers the 2014 Budget at 12.30pm today (Wednesday, 19 March).
The economy might be growing again overall, but the national debt is pushing past 75% of GDP, a general election is just a year away and businesses are hoping the tentative recovery is here to stay.
Farmers Weekly will be reporting on the chancellor’s speech as he delivers it and has lined up a panel of accountants, lawyers and advisers to explain its impact on farming families and businesses (see box below). You can follow their commentary live as Mr Osbourne speaks from the House of Commons.
Some of our panel have set out what they think the Budget will contain.
Michael Parker, NFU head of tax, said: “We want to see the Annual Investment Allowance (AIA) for plant and machinery continue at the current rate of £250,000.
“We think that’s important because it is due to go back down to the £25,000 figure in a year’s time, which would potentially reduce investment levels and lengthen our replacement cycles.
“We have also suggested they look at a form of tax relief on any new infrastructure.”
Carlton Collister, consultant at landtax, said: “The already-announced employment allowance saving on national insurance of up to £2,000/employer from 6 April will be a welcome saving for most farmers.
“I have hope of an extension of the AIA, and for business planning it would be better if this were set out now.
“My guess [for an AIA change] would be back to £100,000, as the current £250,000 limit appears generous – it may be for farmers, but probably not for an export-driven recovery.”
Andrew Arnott, partner at accountants Saffery Champness, said: “I hope there will be a raising of the 40% income tax threshold, which now stands at about £3,000 less than it was a few years ago, and with an election looming this could well happen.
“The Office of Tax Simplification has been reviewing the provision of living accommodation to employees, where farm employees have traditionally been housed with an exemption from any associated benefit in kind.
“There is a distinct possibility this will be ‘simplified’, which usually means no exemption going forward and increased tax liabilities for farm employees, who may in turn look to their employers to meet this additional tax.”
Rebecca Spencer, associate at law firm Withers, said: “We are expecting the 2014 Budget will be relatively quiet as 2015 is an election year and therefore the bigger announcements are likely to take place then.
“It seems likely that this budget will consolidate plans already announced, such as an increase in the personal income tax allowance and a cut in corporate tax rates.
“Also of interest to the rural community will be a likely freeze in fuel duties.”