Thursday, 23 March 2017
Sixth Form students from the Girls’ Division and Boys’ Division of Bolton School enjoyed a fascinating lunchtime seminar which gave insight into the government’s Budget. Lisa Wilson and Dominic Aspinall of chartered accountancy firm Cowgill Holloway, delivered a talk focusing on “What is the Budget and Why is it Important?”
The audience, largely comprising Business and Economics students, was told how the last budget on 8 March was, from the tax consultant’s perspective, relatively dull. Lisa Wilson explained that this was largely due to Brexit as the government wants to give an appearance of stability and business as usual. The Spring budget has, traditionally, been when tax announcements have been made, whilst the Autumn statement focuses more on policy.
Students learnt how the government collects money, often in the form of taxes and duties, and then decides how best to spend it on behalf of the country – dividing it between different areas such as transport and infrastructure, defence and policing, health, education, work and pensions. Consideration was given to the different taxes that we pay, including VAT, income tax, car tax, stamp duty, land tax, inheritance tax and corporation tax. It was noted that businesses are collection agents for the HMRC as it is their duty to collect employees’ VAT and income tax.
The “tax gap” is thought to be £36 billion, which is the difference between what we actually collect and that which we think we should collect. This “lost” money is due to the hidden economy, tax evasion and people misinterpreting the legislation. The UK has the most complex and largest tax legislature in the world and work is currently being undertaken on trying to simplify it.
A lively questions and answers session considered the flattening of taxes, whereby those with the broadest shoulders should take the most strain; fiscal drag in relation to the inheritance tax, where the laws have not caught up with inflation; the recent government retraction vis-à-vis national insurance rates for the self-employed; the national debt of £1.8 trillion or £29,000 per individual; the need for professional advisers because of the complex tax laws; and the history of Gladstone’s 1860 red budget box and its recent updating by George Brown.
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