As with any Budget statement, it is best to take a few days before passing judgement.  That said, and even before all of the detail has been analysed, there are a number of issues that stand out even just 24 hours after the Chancellor sat down.

The first concerns the debate, for “debate” read “leak everything”, that has surrounded a large number of Budget issues over the last few months.  We have a come a long way from the days when Gordon Brown did not even tell Tony Blair what was going to be in the Budget statement.

The proposed reduction in the top rate of income tax has dominated the political news coverage over the last few months.  The debate over how much it has raised will not end with the Budget statement.  There is no doubt it has led to a great deal of tax avoidance, aggressive tax avoidance.  That was to be expected.

The changes to the personal allowance and tax rate thresholds, has already begun to dominate the news coverage.  The coalition government must be hoping that the news coverage concentrates on the increase in the personal allowance and not the 300,000 more people who will be drawn into the 40% income tax rate from 2013/14.  To put this in context.  In the 1980’s approximately 5% of people were higher rate taxpayers.  Now it is 15%.

The freezing of age related allowances is also likely to cause problems for the coalition government.  Somehow they need to show that this is a good example of tax simplification.

The claim that does stand out is that by reducing the top rate of income tax, combined with other avoidance measures, five times more tax will be raised from the richest.  The Institute of Fiscal Studies noted today that that this is the third worst Budget statement for measures relating to tax avoidance.  This is measured on how much tax the avoidance measures to be introduced are likely to save.

Now to an old Budget favourite, stamp duty and Stamp Duty Land Tax (SDLT).  The SDLT changes were not unexpected especially for anyone who buys a Sunday newspaper.  The Chancellor announced that the level of stamp duty on residential properties over £2m which were bought via a company would increase to 15% with immediate effect.  In addition, overseas companies that already own UK residential property worth more than £2m will be subject to capital gains tax (CGT) from April 2013.  The CGT point was less expected but nonetheless welcome.  This though should have been dealt with many years ago.  The Chancellor also made it very clear if avoidance of this kind continues, further measures would be introduced without warning which have retrospective effect.

That though is not the main issue with SDLT in Scotland.  In Scotland only around 10 properties a year are sold that are worth over £2m.  The jump from 1% to 3% of SDLT at £250,001 is a much bigger issue.  Hopefully that will be one of the first issues dealt with when this tax is finally under the control of the Scottish Parliament.

One change I was hoping to see, in vain I might add, was a targeted VAT reduction for home repairs and renovations.    

Now to the fiscal powers debate.

The UK and Scottish Governments have agreed a number of changes to the Scotland Bill.  Both Governments will now recommend that their respective Parliaments support the Bill.  A number of minor changes have been agreed.  The Scottish Government has secured changes to the sections of the Bill dealing with borrowing powers and the Supreme Court.  It was also agreed that the measures contained in the Scotland Bill would only be implemented with the agreement of the Scottish Parliament.

The proposed reservations of insolvency procedures and regulation of health professions will also be removed preserving the Scottish Parliament’s existing legislative competence for these areas.  More on this can be found on the Scottish Government’s website which can be found here.  The list of proposed amendments agreed by both the present, and previous, Scottish Parliament Scotland Bill committees is also listed.  These lists show how few changes have been made to this Bill.  A report from the BBC news website on this matter can be found here.

The House of Commons Scottish Affairs Committee has said that the Crown Estate’s control of 50% of Scotland’s coast and almost all the seabed should be devolved to Scotland’s local authorities.  The Scottish Affairs Committee said management of the marine environment lacked transparency and public consultation.  It is now difficult to find someone who is opposed to devolving this power.  Does that mean the Scotland Bill will be further amended to include this power?  I suspect not.  More on this can be found on a report on the BBC news website which can be found here.

I was intrigued to see the Secretary State for Scotland, Michael Moore, asking for tax clarity from the Scottish Government and in relation to the independence referendum.  There is a simple answer to this question, and which would provide a degree of certainty for individuals and businesses alike.  There should be no major changes for two or even three years to the tax legislation, and system of administration, that the Scottish Government inherits in the event of a “yes” vote.

I was not surprised to read that the Scottish Government is struggling to persuade HM Treasury that the new Scottish police and fire services should be exempt from VAT.  This is likely to mean an annual VAT cost of between £22 and £36m.  Under the current structure police forces are treated like local authorities and are exempt from VAT.  However, if they merge they may be subject to VAT.  A report on this from the BBC news website can be found here.  My earlier blog on this can also be found here.

The new definition of a charity will apply to all UK charity tax reliefs from April 2012.  More information on this can be found here.  I still find it odd that when it seems that everyone is talking about tax simplification, that bodies wishing to become a charity have to meet various conditions set by OSCR (Office of the Scottish Charity Regulator) and then by HMRC.  The reason for this is that the definition of a charity in Scotland is different from that used in England and Wales.  HMRC apply English and Welsh law.  This means if Scottish charities wish to claim the various UK charity tax reliefs then they also have to submit an application to HMRC.  What utter nonsense.  If the UK Government were serious about tax simplification, the fact that you are registered as a Scottish charity should be enough to allow a charity to claim the various UK tax reliefs.  The same issue applies in Northern Ireland as it now has its own charity regulator.

I was interested to see that the European Parliament has finally voted to approve the cross border inheritance law proposed by the European Commission to clarify which jurisdiction’s succession law should govern an international estate. The UK and Ireland remain opted out of the regulation.  A report on this from the BBC news website can be found here.

François Hollande, the Socialist candidate for the French presidency, has provided more detail of his plan for a 75% top rate of income tax.  He now says there will be a ceiling on the total tax paid by an individual in one year; and that the rate will be only temporary until the public sector budget is balanced.

Finally to Greece and some encouraging news.  The head of the European Union’s Greek task force, Horst Reichenbach, has reported the collection of almost €1bn (£830m) in back taxes.  Almost double the target figure.  A good start but still a fraction of the amount outstanding as they believe there is around €8bn in uncollected tax revenues.  More on this from a report on the BBC news website can be found here.

Have a good weekend.

More information on the new contact details for the Edinburgh Stamp Office can be found here.

There is no longer a Stamp Office presence at the Registers of Scotland.

Let’s start with the proposal for a Financial Transaction Tax.  The Archbishop of Canterbury has now come out in support of this.   Even at this early stage there are a number of obvious questions.  Just the Eurozone countries? All of the European Union?  Wider?  Who will it apply to, buyer or seller or both? Who will collect it?  Who will administer it?  What happens to taxes such as UK stamp duty which is a financial transaction tax.  All financial transactions?  Do you look to where the parties or the assets are located?  What if any reliefs will apply?  Think that is enough for now.

Now to the fiscal powers debate.  First to Labour.  Ed Milliband said this week that “devo max” is not the right option for Scotland.  This places him at odds with other senior members of the Labour party in Scotland.  Labour MP and candidate for the Scottish Labour leadership contest Tom Harris argued that a permanent ‘Calman Commission’ should be set up to ensure devolution was constantly monitored.  Mr Harris also suggested that such a commission should have a remit that would allow powers to be handed back to Westminster.

The Liberals also announced another commission on fiscal powers for Scotland.  This one is to be named “Home Rule”.  A favourite term of the Liberals.  Between 1889 and 1914 four Bills advocating Scottish “Home Rule” were defeated.  In 1913 a Home Rule Bill passed its second reading, however World War I intervened and the idea was dropped.  Menzies Campbell is in charge of the latest commission.  One question that does need  to be asked.  Are the Liberals updating the well regarded Steel Commission or are they starting from scratch?  I also find it interesting that each of those mentioned above is an MP.

Three Scottish local authorities have been given the green light to raise funds for infrastructure projects.  The Scottish Government this week approved the schemes to be developed under the tax incremental financing model.  This allows councils to borrow against the likely business rate gains that will result from an infrastructure project.  The article from the Scotsman can be found here.

Now to air passenger duty.  It seems that this tax is in the news every week.  The Scotsman reported that aviation bosses have launched a scathing attack on a planned increase in air passenger duty.   The heads of 12 airports sent an open letter to UK Chancellor George Osborne warning that the increase next year will further stifle the aviation industry at a time when passenger numbers are flat-lining.  As I have blogged before the three Scottish airports are  supporting a campaign for air passenger duty to be devolved.

Now to the never ending battle between the UK tax authorities and those seeking to avoid paying tax.  In case you don’t realise how serious an issue this is remember the situation Greece is now in.  HMRC have created a new 200 strong team of investigators and specialists who it is said will use new and innovative risk assessment techniques to identify areas where wealthy individuals are avoiding and evading taxes and duties.  One of the first groups being targeted is wealthy individuals who own land and property abroad.