Anne Redston

I spend every Budget Day in the same way. Initially, I’ll focus on the headline items, and then comb the footnotes, hunting for the red tape hidden in the nooks and crannies.

This time, however, my digging found something different: a pruning back of onerous provisions. Here are some examples: plant and machinery pools worth £1,000 or less can now be written off in a single year; the de minimis threshold for non-domiciled individuals was doubled to £2,000; a new relief for trivial pensions has been announced and there are to be simpler procedures for ISA and Child Trust Fund administrators.

Business Note 35 even announced that certain anti-avoidance clauses will be eliminated because they are ‘obsolete’, contradicting the belief that anti-avoidance rules are left to wither on the tax vine, so people can puzzle over their purpose, and worry lest innocent planning is accidentally damaged.

Another welcome surprise was the deferral of income shifting. If enacted, these rules would have obliged family businesses to justify how profits were distributed, a time-consuming process.

In short, these two short pages of legislation would have created a riot of red tape. The Treasury’s willingness to listen to our comments, and then to defer the decision, is a further indicator of a changed approach.

But experience of many Budgets has made me cynical. What about the consultation papers lurking among the supplementary documents section of the HMRC site? But instead of badly targeted avoidance provisions, there’s a low-key discussion document entitled ‘simplification review: tax calculations and returns for smaller companies’.

This Budget also delivered huge changes to the tax system: a radical reshaping of the familiar capital allowances regime, root and branch reform of capital gains and the taxation of non-doms and a shake-up of the penalty provisions. It is in these major reforms that the real meat of this Budget is to be found.

But as well as these substantive changes, already much commented on by practitioners, this Budget had something different, a new flavour. The prunings, the willingness to listen, the openness to regulatory reduction ­ these may be but straws in the wind, but it is a wind which is blowing in the right direction.

Anne Redston is a visiting professor at King’s College, London and a member of the ICAEW Tax Faculty’s Technical Committee

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