On 23 March the Chancellor made his annual Budget Statement in which he outlined his vision for stimulating growth and cutting regulation. Here is a brief summary of those areas affecting sport and the environment.
The Government’s economic policy objective is to achieve strong, sustainable and balanced growth that is more evenly shared across the country and between industries. In the June Budget 2010, the Government took action to re-build the British economy based on its values of responsibility, freedom and fairness. Through the Budget and the Spending Review, the Government set out an accelerated plan to reduce the deficit. This Budget confirms that the Government is continuing this course, and now accelerates the process of reforming the British economy, to achieve a new model of sustainable and balanced growth. The full budget can be found here.
The Budget sets out actions that the Government will take in the following three areas:
A strong and stable economy – including fiscal policy bringing public finances under control over the medium term, monetary policy ensuring price stability, reform of financial sector regulation ensuring financial stability and microeconomic policies driving growth. The Office for Budget Responsibility’s latest fiscal forecast shows that the outlook for the public finances is broadly unchanged since June Budget 2010 e.g. public sector net borrowing will decline from its peak of 11.1 per cent of GDP in 2009-10 to 1.5 per cent of GDP in 2015-16, public sector net debt will peak at 70.9 per cent of GDP in 2013-14, before declining to 70.5 per cent of GDP in 2014-15 and 69.1 per cent of GDP in 2015-16.
Growth – including reducing the main rate of corporation tax by a further 1%, simplifying the tax system, introducing a powerful new presumption in favour of sustainable development so that the default is ‘yes’ and pilot land auctions, starting with public sector land, streamlining the system for planning applications and introducing new fast-track planning for major infrastructure.
Fairness – including increasing personal allowance for under 65s by £630 in April 2012, cutting fuel duty, reducing inheritance tax to 36% from April 2012 for estates leaving 10% or more to charity, allowing charities to claim Gift Aid on up to £5,000 of small donations per year.
The 2011 Budget, the Environment and Sport – policy extracts
Planning reform
1.82 The planning system has held back investment and created distortions in the way that businesses compete, deterring development and growth. To address this, the Government will:
• introduce a new presumption in favour of sustainable development, so that the default answer to development is ‘yes’
• localise choice about the use of previously developed land, removing nationally imposed targets while retaining existing controls on greenbelt land
• pilot a land auction model, starting with public sector land
• introduce a number of measures to streamline the planning applications and related consents regimes removing bureaucracy from the system and speeding it up. This will include a 12 month guarantee for the processing of all planning applications, including any appeals
• ensure a fast-track planning process for major infrastructure applications through the Major Infrastructure Planning system
• consult on proposals to make it easier to convert commercial premises to residential
1.83 To accelerate the release of public sector land to support homes and jobs, the Government will work with local authorities to expedite planning decisions for surplus military land and other public sites suitable for housing, also testing ’build now, pay later’ techniques to quicken delivery. Together with the new presumption in favour of sustainable development, these proposals will potentially allow the Ministry of Defence to realise up to £350 million of estate disposals and enable delivery of up to 20,000 new homes by 2014-15.
Gift Aid
2.112 Gift Aid benefit limits – The Gift Aid benefit limit will be increased from £500 to £2,500, subject to the existing 5 per cent limit, from April 2011. New guidance will be published to help clarify what constitutes a benefit. (Finance Bill 2011)
2.113 Gift Aid small donations scheme – From April 2013, the Government will introduce a new scheme to allow charities to claim Gift Aid on up to £5,000 of small donations without the need for Gift Aid declarations.
2.114 Gift Aid online filing – The Government confirms that it will introduce an online system for charities to claim Gift Aid and as a first step will shortly be publishing ‘intelligent’ forms (which contain automatic checks) for charities to use to apply for and claim tax reliefs
2.115 Self Assessment (SA) Donate – To help fund the introduction of Gift Aid online filing, the Government will withdraw SA Donate for tax returns for 2011-12 onwards. (Finance Bill 2012)
Other tax measures affecting charities
2.116 Inheritance tax: reduced rate for charitable donations – From 6 April 2012, the Government will introduce a reduced rate of inheritance tax of 36 per cent for estates leaving 10 per cent or more to charity. (Finance Bill 2012)
2.117 Gifts of works of art – The Government will consult in 2011 on proposals to encourage donations of pre-eminent works of art or historical objects to the nation in return for a tax reduction
2.118 In-year repayments on tax to charities – The Government will legislate an extra statutory concession under which HMRC makes repayments of tax to certain charities without requiring a tax return to be completed. (Finance Bill 2012)
2.119 Changes to the substantial donors rules – In December 2010, the Government published draft clauses to replace the substantial donors to charities legislation. This antiavoidance legislation denies relief where the donor enters into arrangements with the main purpose of obtaining a financial advantage from the charity. The new rules will commence from April 2011. (Finance Bill 2011)
Aggregates levy
2.152 Aggregates levy – Following the suspension of the aggregates levy credit scheme in Northern Ireland, the increase in the aggregates levy rate from £2.00 to £2.10 scheduled for 1 April 2011 will not go ahead. The Government is legislating to enable the operation of the scheme until 2021, pending EU State aid approval. (Finance Bill 2011)
2.153 The Government intends that the aggregates levy rate will increase to £2.10 in April 2012. (Finance Bill 2012)
Environment
1.110 The Government is committed to being the greenest Government ever. A simple, efficient and cost effective policy framework will meet environmental objectives while supporting growth and maintaining a sound fiscal position. Market-based solutions to price carbon are at the heart of this approach, achieving objectives at the lowest possible cost.
1.111 The Government will increase the proportion of tax revenue accounted for by environmental taxes. Tax policy will be developed in the context of wider Government levers (such as voluntary agreements and regulation) and overlap of policy instruments will be avoided.
The Government announced that:
• following consultation, a carbon price floor for electricity generation will be introduced from 1 April 2013. The carbon price floor will start at around £16 per tonne of carbon dioxide and follow a linear path to £30 per tonne in 2020 to drive investment in the low-carbon power sector. The carbon price support rates for 2013-14 will be equivalent to £4.94 per tonne of carbon dioxide
• Climate Change Agreements (CCAs) will be extended to 2023. The climate change levy discount on electricity for CCA participants will be increased from 65 to 80 % from April 2013 to continue to support energy intensive businesses exposed to international competition. A consultation on proposals to simplify the agreements will be published by summer 2011
• it remains committed to providing public funding for four Carbon Capture and Storage (CCS) demonstration plants. However, consistent with its objectives for tax simplification, it will not proceed with the CCS levy. It will instead fund its commitments to CCS demonstrations from general taxation
1.112 The Government is committed to ensuring that the Green Investment Bank (GIB) has the resources to help the UK to move towards a low-carbon economy. The Government announces that the initial capitalisation of the GIB will be £3 billion and that the GIB will begin operation in 2012-13, a year earlier than previously anticipated. Government investment alongside private finance should mean that there is in the region of an additional £18 billion of investment in green infrastructure by 2014-15 as a result of the GIB. The Spending Review allocated £1 billion for the GIB and the Government is aiming for the remaining £2 billion to be funded from the sale of assets. This will include the £775 million net proceeds already received from the sale of High Speed I, ensuring that funding is in place to allow GIB investments from 2012-13. The Government will enable the GIB to have borrowing powers from 2015-16 and once the target for debt to be falling as a percentage of GDP has been met.
1.113 The Government is committed to the success of the Green Deal and will act to encourage and incentivise take-up so that the Green Deal will appeal to households, businesses and prospective providers alike, before it is introduced in 2012.
Other aspects of the Budget relevant to sport are as follows:
On fuel duty, the Chancellor announced that the 4p rise in duty which was due to come into effect next month has been cancelled, and that a 1p cut in duty would take affect at 6pm on the evening of 23 March.
The Government plans to consult shortly on proposals to address water affordability, with particular focus on areas with particularly high water bills, such as the South West.
It was also announced that as part of the Government’s de-regulation drive dual discrimination rules (set out in the Equality Act) will not be brought forward.
Finally, the Chancellor confirmed that Lord Young’s review of health and safety will be implemented.
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