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March 2015

Hall Morrice comments on Budget 2015

Chancellor George Osborne has delivered his last Budget speech of this Government. Here's what our director of tax, Bob Bain, had to say about Budget 2015:

I consider it to be part budget and part manifesto. The reality is that the Government now has seven working days to implement this before the General Election - some things will happen right away, but others will take months of planning. Therefore, I wonder how much of it will actually happen.

It was thought that this would be a budget of austerity, but as one would expect with a pre-election budget, there were a few giveaways which the Chancellor no doubt hopes will help to win votes.

The thing that interests me in particular is the access to annuities and I really do feel that it's a risk that could be a disaster for the future. The changes that the Chancellor has announced will allow people who have a private pension fund to draw it all down in a lump sum, but it concerns me how people will manage this. There could be temptation for some to draw it all down now, and not plan for the future. This is something that needs to be carefully managed.

The announcement on the Help to Buy ISAs - where the Government will contribute 50 for every 200 saved for a house deposit by first time buyers - was one of the key giveaways and will be a very popular move. But as with everything else announced by the Chancellor, the devil will be in the detail.

The key question for me is, 'how long will it be in place?' People need to have the time to save and if this is going to be a short-term measure it may not be as effective as anticipated. I also think that the Chancellor is making assumptions about average house prices: while this may be a good deal for people in some parts of the country, the high cost of property in Aberdeen and the north east has been well documented and could continue to be a barrier to first time buyers.

I am sure the move to abolish tax return forms will be very popular, but it may be that some people will not like the alternative. Initially this is aimed at the self-employed and small businesses, but gradually everyone will move to the new digital form.

Again, we need more detail, but while the new system will save on processing costs it may not be fool proof, and may provide HMRC with increased direct access to information.

I am particularly keen to get further details on proposals for entrepreneurs' relief. It does appear, however, the Chancellor is making changes to limit the ability of companies to set up contrived structures purely for tax avoidance, and therefore it should not affect the vast majority of people.

Likewise, he did not give anything away for businesses claiming annual investment allowances. At this stage we are only being told half the story, and I hope that more will become clear over the course of the next week.

Formed in 1976, Hall Morrice offers accountancy services across major sectors including oil and gas, construction, retail and service industries, with offices in both Aberdeen and Fraserburgh. Hall Morrice is based at 6 and 7 Queen's Terrace in Aberdeen and can be contacted on 01224 647394 or at

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