In his more earnest moments the Chancellor announced he would hold the inheritance tax threshold – but he also found time for fun by announcing plans to sign a tax agreement with Belize
Mr Darling also revealed plans to claw back money through a tax information exchange agreements with Belize – where the Conservatives’ non dom deputy chairman Lord Ashcroft is based.
Meanwhile, increasing numbers of families will be caught in the inheritance tax net after the Government announced plans to freeze the threshold at £325,000 for four years in order to fund the cost of care for the elderly.
Speaking of the Belize agreement, the Chancellor said measures in his Budget would bring in additional tax worth half a billion pounds each year.
He told MPs, to Labour cheers: “I can also now tell the House that we are ready to sign tax information exchange agreements with three additional countries - Dominica, Grenada and Belize.”
However, Johnathan Dudley, Midlands managing partner at accountants and business advisers Horwath Clark Whitehill, said the announcement of a tax information exchange agreement with Belize was a “cheap shot”.
Mr Dudley quipped: “It was a Budget for small business owning pensioners with children under two who are first time buyers and don’t live in the cider-loving South-west.”
Tracey Macintosh, tax partner at BDO, added: “The data received from five retail banks in the UK showed HMRC that only 25 per cent of individuals declared income from offshore accounts on their tax returns. This information is cited as one of the main reasons for pushing through further tough laws to stop tax evaders – that, and the desperate need to raise tax revenues.” The Chancellor’s announcement about the freezing of the inheritance tax nil rate band at £325,000, which is likely to last for the life of the next Parliament, represents a back-track on previous announcements that the threshold would be raised to £350,000.
Steven Holden, tax specialist at MFG Solicitors, in Halesowen, said: “We are concerned at the decision to freeze the Inheritance Tax threshold at the current level for four years, as this was forecast to increase from £325,000 to £350,000 in 2012.”
David Kilshaw, partner at KPMG, said: “By freezing the nil rate band for the next four years, the Chancellor has put the teeth back into inheritance tax.”
Simon Jonsson, head of tax and people services at KPMG in the Midlands, said he believed there was little inventiveness about the taxation elements of the Budget.
He said: “It’s unfortunate that the Budget contained no radical thinking as regards the taxation of corporate sector.
“This is disappointing given that the Chancellor recognised that one key element in repaying the country’s debt will be growth of the economy and business is, after all, the engine of that growth.
“This is a missed opportunity in our view, although perhaps not surprising.
Steve Hollis, senior partner at KPMG in Birmingham, said: “The bottom line is that the crisis is thought to have permanently shrunk the economy by five per cent.
“On average we will all be correspondingly worse off – the question now is how the pain will be distributed.”
Richard Boot, West Midlands chairman of the Institute of Directors, said: “The Chancellor’s GDP forecasts are too optimistic and there is still no sign of a credible deficit reduction plan, but we certainly welcome the specific measures to support small and medium-sized businesses.”
