Stock up for Christmas

There will be a lot said about the Chancellor's report today. Will the reduction in VAT have the desired effect or will it just mean a lot of work changing prices for a short period and then putting them all back again in January 2010.

But there is an old-fashioned budget point to note:

• Ciggies and other tobacco products go up in price straight away


• Alcohol prices go up at the weekend.

So if you are planning to buy in something for Christmas it is likely to cost more next week.

Or is this the economic boost that Alistair Darling is aiming for - a quick boost in alcohol sales?

Can we trust HMRC with our data?

This morning's news was talking about the number of computers which might have contained data which were lost by government departments. The question was asked - should we be going ahead with an ID card containing even more information about us if the government cannot be trusted to keep it safe.

This afternoon I received a note referring to an apology from HMRC to taxpayers who have been charged a penalty for failing to submit a payroll form to the Revenue when they had submitted that form using the online service.

Given the difficulties using computer systems, should we ask the government to go back to using pieces of paper and filing cabinets?

Tax doesnt have to be taxing

I have just picked up a press release from the CIoT (Chartered Institute of Taxation). Sorry for borrowing their title, but it does make sense - when the farming and related industries went through crises because of foot and mouth etc, they were given time to pay. The latest crisis and the fact that you cannot borrow even if you want to, should mean similar treatment for cash-strapped businesses.

Tax cut? Change what? VAT?

Yesterday the Chartered Institute of Tax issued a warning to the chancellor Gordon Brown Alistair Darling to be careful about any tax cuts to stimulate the economy out of a downturn. Whilst conservative and liberal spokesmen can say what they like knowing that they can change their minds before there is any chance that their proposals would be implemented, labour must be much more careful.

The warning is simple - get it wrong and you could create problems for the future.

The idea put forward is to reduce the rate of VAT temporarily (which is apparently allowed under European Law).

The problem is that even if it is a very good idea (and a reduction in the VAT rate probably helps those on lower incomes more than those on higher incomes and is therefore a sensible measure when unemployment is rising), it does not have the same political benefit as a 1p cut in income tax, which we all understand.

An alternative suggestion from small businessmen is a reduction in employer’s national insurance - what employers have to pay in addition to gross salaries. This could be a temporary measure as well and could help keep a few people in jobs. But the government is more likely to pay employers something to take on new employees as an obvious way of trying to reduce unemployment