A GIVEAWAY pre-Budget statement can be expected from Chancellor Alistair Darling on Monday, but we should not expect to benefit too much here, warns a local tax expert.
Ernst & Young partner Graham Parrott (pictured) said a generous Budget would mean little to the island, as any measures would have little impact upon us.
‘Despite increased concern over the level of government borrowing, all the predictions and calls are for tax cuts or fiscal stimulus, seemingly funded by further debt in order to try and boost the flagging UK economy,’ he said.
‘A figure of £10-£15bn. has been quoted. The government is keen to ensure their generosity is put to good use, rather than just squirrelled away,’ said Mr Parrott.
‘Above all, he will wish to avoid the furore surrounding the 10p rate earlier this year.’
Mr Parrott said it was fairly clear what Mr Darling would do and it was unlikely the island would be a target.
‘That’s not to say we will not be collateral beneficiaries.
‘It’s important to look out for those things Guernsey does not want to see, particularly if the chancellor looks for ways other than borrowing to finance the money he is putting into UK pockets.’
Should Mr Darling follow the path taken by Treasury and Resources minister Charles Parkinson with increased personal allowances, this could benefit anyone living in Guernsey who has a UK source of income.
A reduction in the basic rate of tax, income or corporation tax would have a similar effect.
But, Mr Parrott warned that neither measure could truly be described as targeted.
‘In his last Budget the chancellor sought to boost the housing market with a stamp duty holiday which, as when it has been attempted previously, has not been conspicuous by its success.’
‘He may give up or instead make the holiday longer or bigger.
‘That could help islanders seeking to buy a UK property, and benefit the many UK property funds based here.’
Talk suggests Mr Darling might reduce some VAT, which again could help some islanders.
Mr Parrott said the chancellor might also seek to limit the adverse impact of previous changes made to the way the UK taxes UK non-doms and more specifically offshore trusts.
‘This would benefit the fiduciary sector in Guernsey and may help the banks.
‘One particular problem he may seek to address is the disincentive this has caused to investing into the UK.
‘We could see some unintended benefits from any pre-Budget giveaway, but they are likely to be limited.
‘There are also the things that hopefully will not be there.
‘Perversely he could go the other way as far as foreigners owning UK assets are concerned, though in this case those not living there.’
Islanders will be looking to see if the exemption for postal goods imported into the UK costing less than £18 plus postage is removed.
This has attracted criticism in the UK, particularly from small business groups which could expect to be one of Mr Darling’s targets.
‘Increasing it would be good, but probably too good,’ said Mr Parrott.
He said there was expectation of another stick and carrot offshore disclosure facility or amnesty, despite the lack of success of the previous attempt, which is likely to give the island some negative PR.
‘We can now say with certainty that will happen as it has already been announced separately.’
As far as UK companies are concerned, the UK government has been looking at taxation of foreign profits for some time, he said, and it will be interesting to see if there are announcements in this area, which could hit corporate structures here.A WOULD-BE parachutist presented her sponsorship money to Bulstrode House yesterday, after six failed jump attempts.
Emily Bourgaize, 17, from St Sampson’s, presented the £1,400 cheque to Jurat Keith Bichard, chairman of the Guernsey Society for Cancer Relief. She had attempted to do the jump six times.
Unforeseen weather conditions coupled with expensive travel costs to Jersey, where the jump had been arranged, meant she had to call a halt to the idea.
Miss Bourgaize said her sponsors had been fantastic, despite the fact she hadn’t completed her objective.
Her mother, Michelle Mauger, 38, said she was pleased her sponsors had been so supportive.
‘It’s been lovely that they’re still happy to be charitable and donate.
‘I think they feel that it’s not through lack of trying that Emily hasn’t been able to succeed.’
Emily had raised the money for Bulstrode House where her grandad, Michael, had received treatment. The youngest of 17 siblings, Mr Bourgaize died of stomach cancer five days before his 60th birthday.
Mrs Mauger said her father would have been very proud of Emily.
‘He would have thought it was absolutely remarkable,’ she said.
Jurat Bichard commended Emily’s efforts and thanked her for the cheque she had given him.
‘It’s incredibly generous of people to sponsor her and incredibly generous of them to let her keep the money to pass it on to us,’ he said.
‘Everyone has been really generous. So many people we don’t even know have sponsored me,’ said Emily. ‘It’s really, really lovely.’ togier@guernsey-press.com
Article posted on 22nd November, 2008 - 9.23am
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