Bankers who made bad judgements still raking in bonuses in companies making losses, alongside advisers whose sole role is to help the rich pay no tax. PAYE Britain is not impressed.
This was not a budget for the housing or mortgage market, as we had already been given our benefits over the last few months. The government underwritten insurance in the New Buy scheme will go some way to bringing some much needed activity back to the building sector and provides confidence and activity in the market. More consumers will think they can transact. The additional funds (£150m) announced this week into the Get Britain Building scheme will also encourage builders to commence activity in “shovel ready” sites. A quick result. Finally the slower burn of enhancing Right to Buy will improve the quality of the housing stock and provide more affordable homes.
Our penance was delivered on Stamp Duty. Not only a new 7% rate, but a stonking 15% on company vehicles. This however was not the real issue. In his speech he indicated the government may act retrospectively on avoidance measures including the use of companies and offshore trusts to avoid stamp duty.
George Osborne said: “A major source of abuse – and one that rouses the anger of many of our citizens – is the way some people avoid the Stamp Duty that the rest of the population pays, including by using companies to buy expensive residential property.”
He called tax evasion and “aggressive tax avoidance…morally repugnant…… I have given plenty of public warnings that this abuse should stop. Now I’m taking action…….I will not hesitate to move swiftly, without notice and retrospectively if inappropriate ways around these new rules are found. People have been warned.”
Osborne also flagged a promised consultation on the introduction of a large annual charge on those £2m residential properties which are already contained in corporate envelopes; and, to ensure that wealthy non-residents are also caught by these changes, a capital gains tax on residential property held in overseas envelopes. Our industry has been party to forcing a fundamental change to the principles of taxation that have held good for over a hundred years. Retrospection permitted and avoidance outlawed slays two sacred cows.
We have a choice in our daily work. We can do the right thing by following the principles of what is correct, or we can push the envelope and reap the “rewards”. I fear the industry is in the last chance saloon.
Robert Sinclair is director of AMI
