“The storm clouds are clearly gathering in the world economy and that has a consequence for lots of countries including Britain.”
George Osborne’s sober assessment of the progress being made in his mission to balance the nation’s books – an assessment that gives us an uneasy heads-up about what to expect in his Budget on 16th March.
Rumours abound at this stage of the political cycle, with fanciful and contradicting reports, from sources anonymous and vague, about the Chancellor’s Budget announcements.
However, one thing is certain: the Chancellor will continue the rhetoric of the Government supporting everyday workers with ambitions to advance in life. What this will translate to in policy terms is, as ever, anyone’s guess. So let’s join in on the guessing!
Housing and Homes
According to “Whitehall sources” (I told you they were anonymous and vague!), one of the main planks of the Chancellor’s Budget will be an initiative to ‘eradicate homelessness’.
Now, on the surface of it this sounds okay. Obviously the devil will be in the detail of any initiative, and one hopes that private landlords are not punished further for simply existing.
If the Chancellor does want to utilise the PRS for this initiative, we would encourage him to look at Crisis’ new campaign calling on the Government to fund security deposits for the homeless accessing the PRS. Our head of Policy, Chris Norris, recently wrote a blog about the whole thing!
There has been much speculation about Osborne’s plan for pensions – someone has to pay for his “long-term economic plan” and perhaps this time he was going to raid pension pots. Talks of a “Pensions ISA” or a flat rate of tax relief on pension contributions were widely circulated.
However, after much opposition from his backbenchers, as well as a Pensions Minister, the Chancellor confirmed on Sunday that he will not go ahead with reform, and that there would be no changes in pension tax relief in the Budget.
Good news for some! But that still leaves the problem of finding the money to pay for his deficit reduction commitments…
Tax Tax Tax
With landlords across the country still reeling from the double tax bomb we received last year, all ears will be listening intently, yet sheepishly, to the Chancellor next week.
There have been rumours that landlords are not yet out of Osborne’s crosshairs as he could introduce more charges to deter landlords buying homes, or limit tax breaks further in his crusade for home ownership.
What could be of (limited) help to landlords, however, is cutting of the top rate of tax to 40p, and increasing the threshold at which the higher rate of income tax is paid. This would also need to be paid for however, and it seems the most plausible possibility is an increase in fuel duty.
In other tax news, there has been much opposition to plans announced at last year’s Autumn Statement to introduce quarterly tax returns – plans that would affect landlords earning over £10,000 a year. With the Federation of Small Businesses and the British Chambers of Commerce chastising the Government for this change, a watering down of proposals could be on the books.
Overall, the best case scenario for landlords is for Osborne to see the error of his ways and completely u-turn on last year’s attacks on landlords. However this is also the least likely scenario – the Treasury has been unreceptive to the reality of these policies for the last few months so we are not holding our breath for them to suddenly come to their sense.
Whatever happens on the 16th we will be right here to let you know how it affects you and your business, and will continue to lobby the Government for a fair environment for the PRS to thrive.