More Budget reaction
In further reaction to today’s Emergency Budget (see below), the British Retail Consortium has said the Chancellor was right to use public spending cuts as the main means for addressing the deficit, but argues that the VAT increase to 20% is “disappointing”.
The BRC says that increasing the VAT rate will hit jobs, consumer spending and economic growth. However, the retailers’ organisation accepts that the Chancellor has had “tough choices” to make. “With retailers now clear that they face a 20% VAT rise from 4 January, the approach to implementation is their key concern,” it added.
The Telegraph notes that, contrary to the appearance given in the Budget statement, many basic-rate income taxpayers will be caught out by the rise in Capital Gains Tax to 28% from midnight. If a property owner makes a big disposal then they might find they are no longer a basic-rate taxpayer but have become liable at the higher rate.
The paper quotes David Brooks from BDO as saying: “If you are a basic-rate taxpayer who makes a substantial gain from, say, selling a second home or buy-to-let property, then that is likely to push you into the higher rate tax bracket and mean you pay CGT at 28%.”
