Inheritance Tax, the great debate...

None of us like Inheritance Tax, even me who has carved a career out of helping people manage their exposure to it. It is one of the most unjust taxes on the statute book, which is one of the main reasons I have never had too much of a moral dilemma when it comes to helping people arrange their affairs so that they pay only as much as they need to. It was Roy Jenkins who famously said “Inheritance Tax, is broadly speaking a voluntary levy paid by those who distrust their Heirs more than they dislike the Inland Revenue.”

So, enter the news today our incumbent Prime Minister at a Q&A session with Age UK states that only the very wealthy should pay Inheritance Tax. A noble statement, but how does one define "the very wealthy", after all we have seen child benefit removed from households with one person earning over £50,000, but households with two people earning £49,999 each get to keep it. The prime minister said he would like to ease pressure on people who do not regard themselves as “in any way the mega-rich” but whose estates are subject to the tax. Again, a very nice political soundbite, but no real substance there I am afraid Mr Prime Minister.

Let us not forget that George Osborne transformed Tory fortunes at the party’s conference in 2007 – and spooked Gordon Brown into abandoning plans to call an early general election – with a proposal to raise the inheritance tax threshold to £1,000,000. This would have been doubled to £2,000,000 for couples. However, the pledge was quietly dropped after the 2010 general election in the coalition negotiations and tax is still due on estates worth more than £325,000, or £650,000 for couples. We do know that the nil rate band will not be raised before the next general election, as the Lib Dems would veto it, so where does Cameron's declaration leave us? Let us not also forget thatThe Tories ran into trouble during last month's conference unveiling their plans for tax cuts without initially explaining how they would be funded.

Well, I for one think it gives us the strongest indication yet that the Conservative Party, should they get re-elected will start to look at increasing the nil rate threshold. However, I very much doubt that we will see the dizzy heights of the £1,000,000 each mooted by Osborne in 2007. The reason for this is simple, earlier this week the Treasury declared that it's income tax take was significantly down on what it had forecast despite employment being up. The Government has already borrowed £3bn more than it had budgeted for this financial year. Inheritance Tax is one of the easiest taxes for our state to collect given the way the probate system works, as basically you cannot access the deceased assets without notifying HM Revenue & Customs of their value, it is a very simple system when compared to self-assessment for example. All of this against the backdrop of our national deficit means that we are unlikely to see any meaningful tax cuts for Middle England in the near future, although we may get a perfunctory gesture of goodwill from a new Tory Government in 2015.

Apprenticeships. The solution to the skills gap?

Yesterday I was part of an excellent open forum in our great city of Birmingham, talking with other people in the professional and commercial sectors about whether Birmingham had, and if it could continue to capitalise on the country's improving economy. As if to drive home the point of how much the city has changed over recent years it was held in the new and iconic Library of Birmingham. The library is a testament to that metamorphosis having won awards for architectural excellence, a far cry from the national stereotype of our great city. But, you ask, what on earth has this got to do with apprenticeships?

Out of our discussions yesterday came one key issue for me, and it was this that drove the debate on the other issues that were discussed too. From my own point of view, like most professions and industries Tax is facing a bit of a skills gap and with the changes to our education system one could be forgiven for thinking that this might yet get worse given the ever increasing cost of putting the next generation through further and higher education. It became clear that this was an issue across the board, largely put down to the ravages of the recent recession, but how could this be solved?

The answer it would seem (or at least to us yesterday) was that we as leaders in our respective sectors have a responsibility to look not just at how we recruit our new staff, but also how we interact with our societies and the next generation before they reach the workplace and hopefully to inspire them. Apprenticeships are a route that I believe have oft been maligned by poor understanding both by teachers, students, their families and society in general. However, in recent years we have seen the introduction of higher level apprenticeships opening routes into engineering, commerce and even my own beloved profession of Tax. Just last week I was in London celebrating the 25th Anniversary of the Association of Taxation Technicians, where we celebrated not just those who have been in the profession some time (yes, I know I don't look that old but it's amazing what you can do with photoshop!), but those new to it as well. Indeed we promoted our 25ATT25, being 25 young people who have already achieved great things in their short careers of which I would like to point out 3 had come through (or were coming through) the Tax Apprenticeship Scheme!

We left yesterday with a renewed sense of purpose about spreading this message amongst our peers, and doing what we can to involve ourselves in the promotion of alternative routes into work (there are more than just apprenticeships) not just to students and job seekers, but also to our peers who might otherwise disregard such initiatives. This blog post is my first attempt, and it won't be my last...