The Smith & Williamson Budget 2008 brochure

Please note that the details on this page reflect the contents of the 2008 Budget and its associated paperwork. Some points may therefore have been superseded by subsequent events. 

This was Mr Darling's first Budget. In his speech, he went into considerable detail at the micro-economic level and there were relatively few references to detailed tax proposals. Given this background, it was something of a surprise that, as he sat down, HM Treasury issued 107 Budget Notes comprising 270 pages of detailed amendments. This compares with the previous record set by Gordon Brown in 2007 when he issued 81 Budget Notes comprising 189 pages.

The 2008 Budget process was really the final act in a three-act play. Act one took place in March 2007 when Gordon Brown announced reductions in the basic rate of income tax and the standard rate of corporation tax. Act two was the Pre-Budget Report that took place in October 2007 when Mr Darling announced major changes to the capital gains tax regime, the transferability of the inheritance tax (IHT) nil-rate band between married couples and far-reaching changes to the residence and domicile regime.

So today's 107 Budget Notes represent act three.They contained a number of specific anti-avoidance proposals which follow the theme set over the last few years. The Disclosure of Tax Avoidance Schemes (DOTAS) rules mean that HM Revenue & Customs (HMRC) becomes aware of tax mitigation schemes very early on and then takes action to close them down as swiftly as possible. So we can expect such specific proposals to feature in future Budgets.

So far as business generally was concerned, we have detailed changes to the capital allowances rules and some measures designed to tidy up some loose ends.

While we welcome Mr Darling's decision to allow an extra year of consultation on ‘income shifting' for owner-managed and family businesses, we are disappointed that the ‘non-dom' rules are being largely applied.

This may not prove to be the revenue-raising or ‘green' Budget which was widely anticipated, but it has undoubtedly provided for further regulation and anti-avoidance measures to create an ever-increasingly complicated web of UK tax law.

To find out more click here to download a copy of our Budget 2008 brochure.