Budget 2014: Tax Pros Slam Osborne’s Statement as ‘Missed Opportunity’
Budget 2014: Tax Pros Slam Osborne’s Statement as ‘Missed Opportunity’Reuters

UK Chancellor George Osborne pledged to rake back £4bn into the economy by cracking down on tax avoidance schemes while, in tandem, making a range of changes to Britain's personal taxation brackets.

Here's what the pros have to say:

Michael Wistow, head of tax at Berwin Leighton Paisner:

"What we need is a radical overhaul of the UK taxation system, which needs simplifying rather than complicating. The Office for Tax Simplification have singularly failed in their aim. This Budget is a missed opportunity to announce a much needed overhaul of the tax system.

"The Government has accepted the fundamental economic tenet that a dynamic approach to tax, that is low rates and fewer reliefs, actually raises tax receipts. That fundamental principle is being applied for corporate taxes but should also apply to personal taxes. Coalition politics seems to preclude its application to personal tax.

"The top 1% of earners are paying an ever-increasing percentage of overall tax receipts, which currently stands at a third. This is what fairness in tax should be about: whether the top earners pay a higher proportion of the overall tax take rather than a mindless and populist fixation on headline rates."

Martin Taylor, head of client relations at Rebus Group:

"The tax avoidance measures announced by the government in today's Budget are a mixed bag. Essentially the £4bn in tax receipts the government expects to receive from the proposed accelerated upfront payments will certainly fill a hole in the coffers.

"There's also a large volume of people who have been mis-sold a tax avoidance scheme under the DOTAS rules who will now be required pay back tax relief already obtained plus interest. Contrary to popular belief, most people who invested in these tax schemes were actually unaware of the full implications of being in such schemes, and should never have been sold them in the first place.

"By way of example, Rebus acts for 715 clients currently, and 637 of these will be affected by the proposed new legislation. This means they will collectively be paying HMRC £284 million plus interest. The interest could be 30 – 70% of the tax depending on when the relief was first granted, and demands for payment are expected to be sent out shortly after the Finance Bill receives Royal Assent. Taxpayers will be given 90 days to pay.

Ronnie Ludwig, head of the private wealth group at Saffery Champness:

"The requirement to pay tax on disputed tax avoidance schemes is a further bayonet into the dying corpse of aggressive and abusive tax avoidance schemes in the government's anti-avoidance battlefield.

"The fact that those entering into such schemes will have to pay tax up front on the assumption that the schemes will fail when challenged under the General Anti-Abuse Rule (GAAR), will further dissuade all but the most fervent individuals from investing in them. The government war against aggressive tax avoidance continues unabated.

"Following the recent G20 meeting, the government have also today announced a commitment to take action against 'profits shifting' between company groups where advantage is being taken of double tax agreements to remove profits which would otherwise be taxable in the UK.

"This is a populist measure, with the likes of Amazon and Starbucks in the Chancellor's crosshairs. How it will be implemented in practice remains to be seen: success will depend on a genuine internationally co-ordinated approach."