The changing fashions of tax policy

“The past is another country they don’t do things differently there”; with apologies to L P Hartley, it is clear that today’s Budget demonstrates the truth that tax policy makers wilfully fail to learn from experience. Mr Hammond has concentrated upon reverting to tax legislation that has previously been abolished.

So we have the restoration of a PAYE cap to the payable R&D tax credit for SME’s (abolished April 2012), a new Structures and Buildings Allowance (SBA), long live the Industrial Buildings Allowance (IBA) withdrawn between 2007 and 2011. Between 2012 and 2015 they progressively withdrew the tax relief for the acquisition of intangible assets; now they consult on bringing it back. Until the passage of the Enterprise Act in 2002, HMRC was a preferential creditor on insolvency; now they shall be once again.

The increase in the Annual Investment Allowance to £1m is at least a new number, but it marks a return to the regular meddling with the limit and of course it is only scheduled to remain in place for two years.

All of the above can hardly be regarded as delivering the stability conducive to long term business planning. But look on the bright side; if you don’t like this Budget there will probably be another one along when Article 50 is triggered in five months time.