Budget advice for the Chancellor

The Budget is out next week and the Association of Christian Financial Advisers has some advice for Chancellor George Osborne.

Not only do they want to a clampdown on the excesses of payday loan schemes and the companies behind them, they also want to see quick and decisive changes to legislation relating to long term care.

"There is no doubt that the Chancellor and this government have many challenges ahead as to how to move forward while balancing the books," the ACFA said.

"This issue is about justice and being able to 'square the circle' - how to encourage growth and personal responsibility whilst dealing with a mountainous deficit.

"The government should strive to encourage more people to become wealth creators."

The ACFA's Arwyn Bailey has the following advice:

1. Personal Allowances

The Chancellor will probably continue to target the raising of the personal allowance to £10,000 by April 2015.

Bringing relief to those on low income is welcome.


2. Personal Pension – Tax Relief

Will the rumour of abolishing higher rate tax relief come to fruition?

Helping individuals take personal responsibility for their retirement provision is a sound principle. Abolishing higher rate tax relief could be a way to help fund the increase in personal allowances. It will be a fine balancing act for the Chancellor, who will need to provide for those on lower incomes while encouraging everyone to take responsibility for their retirement.


3. 50% Tax Rate

Abolition of this would be a political surprise at a time when the public sector is subject to stiff pay restraint.

Remuneration via a fair wage is important. The Chancellor needs to encourage growth in personal wealth, while acting fairly towards state employees who are experiencing a strict pay freeze.


4. Tax Avoidance

In the light of high profile cases, it is likely the Chancellor will announce a clampdown on tax avoidance schemes.

This is to be welcomed. ACFA adheres to the principle that individuals should collectively participate in the funding of social and welfare care programmes via the taxation system.

5. Fuel Duty

The Chancellor will probably move ahead with measures to strengthen the government’s ‘green’ credentials, and there will be more detail given on the ‘Green Investment Bank’ and associated projects.

Wise stewardship of the Earth’s resources is a clear Christian mandate.

6. Corporation Tax and Business

There will be some announcement of an intention to reduce business rates, perhaps not immediately but within a defined programme.

A reduction in business rates of tax would be welcome to generate growth in society as a whole.