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Chancellors need room for manoeuvre.
The general election campaign has not, it must be admitted, been distinguished by the quality of the discussion about taxation. Of course, it is too much to expect that during the rough and tumble of the debate we could have had a calm and thoughtful Socratic dialogue on the fine points of fiscal policy but surely we could do better than we have so far. Increasingly, what seems to be happening is that the parties are all trying to box each other into an increasingly tight series of commitments. Typically an interviewer will ask about a particular tax, a spokesperson will say ‘we have no plans to increase tax X’ and the opposition will then turn this into ‘party A refuses to rule out an increase in tax X’.
Does anybody, of whatever political persuasion, seriously believe that an incoming government can lay out each and every detail of tax rates and allowances for an entire four to five year period in government? Of course one can, and should, expect a party to set out its broad approach to tax policy so that voters know what they are voting for. But beyond that any chancellor must be given room for manoeuvre. Students of political history will recall that George H W Bush’s statement ‘read my lips: no new taxes’ came back to haunt him when running for re-election in 1992. Indeed many commentators regard it as the key factor leading to his defeat.
Can you imagine a Budget statement in four years’ time in which the chancellor stands up and says: ‘I refer the house to our 2024 manifesto – I have no new announcements.’ Has everybody forgotten Harold Macmillan’s dictum (though there is some doubt about whether he actually said it): ‘Events dear boy.’
If you do one thing…
Read the ATT’s excellent guidance on how to complete tax returns dealing with the transition to the current year basis. See tinyurl.com/atttransitionprtr.
