Scotland got what it stamped its foot for


by Kate Higgins

Hardly worth the bother really.  And certainly not worth the hype, the pomp, and the acres of news coverage it will engender over the next few days.  No doubt there will be details buried behind the headline announcements whose significance will only become clear with close analysis.

But this is about first reactions so let me start with this:  you mean, people who owned private jets didn’t pay passenger tax before now??  And how kind of those non doms who have lived here for 12 years or more to give us £50k of their income.  Before you think that this is a some kind of generous bounty and give George a round of applause, here’s the reality check.  Someone earning £32,000 will pay nearly double that amount in tax and National Insurance in the same twelve year period. 

Scotland got what it had stamped its foot for, with a fuel duty cut and a stalling of the escalator but what’s this?  A massive leap in taxes on the profits from North Sea revenues to pay for it all.  Ahh, a little bit of hypothecation goes a long way and suddenly, all those threats from Tory Ministers about Scotland having to share the benefits from oil and gas with the rest of the UK become real.

For those of you who cannot wait until 2012 to work out whether or not you’ll be worse or better off as a result of this budget, those nice BBC people have got a calculator to help you.  Enter in your details and bingo.  So the burd did just that.  My income, my circumstances, my spending and lifestyle habits and guess what, I’m a winner!  Because I don’t drive a car I’m actually better off.  A whole £9.25 a year.  Wow!  Suddenly that £300 council tax saving from the Scottish Government seems a lot more generous….

Will it make up for all the hits me, and families like mine, are about to take this April through increased National Insurance contributions, loss of child tax credit and the all important childcare element, combined with the impact of the VAT rise and the freezing of child benefit?  Eh, no.  In fact, most families do drive a car, so most will be worse off by over a hundred pounds from next year, on top of the 10 – 15% reduction families on average incomes will face in 2011.  More pain and still very little gain. 

But let’s not look a gift horse in the mouth: let’s work out which shop to spend my bonus in.  I can afford a trip to the cinema but no popcorn.  Nine singles from itunes but no album.  A couple of extra bottles of wine a year.  Two swimming trips for me and the chicklet, but no hot chocolate afterwards.  Three daysaver tickets for the bus.  Gosh, working out how to spend it is going to take an age.

Actually it won’t, because I’ve already decided to give it to a charity.  Good causes were one of the few gainers from this budget with the proposed reform of the administration of gift aid.  If I give my £9.25 to charity, it will be able to claim the tax rebate, at less cost to the organisation than before and producing a double whammy for Westminster.  For good measure, here’s a third.  I’ll also be able to offset my generosity against my income for tax credit purposes.  Do you know, I might just have hit upon a brand new tax avoidance wheeze:  it’s one I’d heartily recommend to others.

You can read Kate Higgins who blogs here

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