This week, George Osborne will be unveiling his fourth (yes, it’s that many) budget. As usual he is under pressure to raise revenue, and with his Lib Dem coalition partners breathing down his neck, my new accountant friend feared that a Mansion Tax ‘through the back door’ would be a distinct possibility.
His view was that although the recent Labour motion to introduce a tax on homes worth £2 million or more was defeated in the House of Commons (funnily enough, this wasn’t Labour policy when they were in government), a Mansion Tax has though been a core Lib Dem policy since 2009. Having helped the Government to defeat the motion, consequently there would be huge pressure heaped on Osborne by the Lib Dems as this headline policy enjoyed huge support from the party faithful and wasn’t going to go away.
Having already imposed a tax on high-value homes bought through companies rather than by individuals or property developers, HMRC have written to thousands of owners, many of whom are foreign nationals, asking them to value their properties in a kind of self assessment. This begins April 1st (really), the annual residential property charge starts at £15,000 a year and will be levied against properties valued between £2 million and £5 million. This then, could also easily be applied to all UK home owners of ‘high end’ property through the existing mechanism of council tax, with the proviso that if the property was sold for more than the assessed figure provided, then charges could be levied on the owner.
A Mansion Tax, whatever way it is introduced, will hit people who have worked hard all their lives to acquire a £2 million property. Any such levy will be significant and many owners of property in this category are not the ‘super rich’ and indeed many would fall into the category of ‘asset rich, cash poor’. However, with the Coalition under pressure to move some of the tax burden from wages to assets, I fear it is just a matter of time before it is introduced.
Considering the copious amount of drink consumed in honour of St Patrick, I am amazed that I can even recall the conversation, but to be fair, it was early in the day – given the state the accountant was in by the end of the night he definitely won’t be able to recall the conversation. In fact, if he can even recall his own name, he will be doing well.
I have avoided mentioning football while QPR’s Harry inspired mini-revival was ongoing, but having crashed and burned 3-2 to relegation rivals Aston Villa at the weekend, I’m afraid I must accept reality. John Cleese’s famous line from the film ‘Clockwise’ sums it up for me, “It’s not the despair, I can take the despair. It’s the hope I can’t stand.”
Well, those of us who follow the R’s can now abandon hope – despair, that most familiar of feelings, we can just learn to live with again.
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