Following the chancellor's eighth Budget please see the following comments relating to the economy.

Forum Response: Association of Chartered Certified Accountants

Robin Jarvis, ACCA head of Small Business, said: "The decision to tax small company dividends - in the name of redressing the balance of businesses which have supposedly 'abused' the corporation tax zero-rate band - could be described as unethical, given that it was only two years ago that businesses were encouraged to adopt incorporated status by the government's introduction of the zero-rate for the first £10,000 of profits."

"This move places many thousands of businesses between a rock and hard place. Now 'in the incorporation net', many of these businesses are finding that the benefits of incorporation are far outweighed by the disadvantages. In turn, thousands will also be forced to remain caught in the net, as disincorporating would subject them to heavy capital gains tax bills on their assets."

"The Inland Revenue appears to have been blurring the boundaries between illegal tax evasion and lawful tax avoidance for some time now. The government has to get the balance right and recognise that the right of individuals and businesses to lawfully minimise their tax liabilities through sensible tax planning must be respected and protected. In addition, certainty for individuals and businesses should be the most important aspect of the tax system and we appear to be moving further and further away from this."

"It is essential that real improvements come out of this move - UK businesses do not need change for change's sake. It is the quality of the support service which is of interest to them, not who is providing it. A good starting point would be for the government and its business support service to form strong, UK-wide working relationships with the established business community, including accountants, who already have strong networks and a wealth of experience in both running businesses and giving business advice."

Forum Response: Association of British Insurers

Mary Francis, director general of the ABI, said; "IPT is generating substantial levels of revenue every year, and it would have been perverse for the Chancellor to raise the rate. We are pleased that he has kept the existing rate, but agree with the growing number of calls for a reduction in future."

Forum Response: Investment Management Association

Richard Saunders, chief executive of the Investment Management Association: "For saving, this Budget is a curate's egg. It is very good news that the Chancellor is going ahead with pensions simplification and we certainly welcome the signal of readiness to look at the simplification of other pooled savings vehicles, like funds. But, despite describing ISAs as 'the government's primary vehicle for tax-free saving outside pensions', the Budget offers no new ideas following the abolition of the dividend tax credit.

"The reforms to the offshore funds rules are however welcome, and we will be responding to the consultation paper on property investment funds to ensure that open-ended funds are given a fair crack of the whip."

Forum Response: Country Land and Business Association

"The imposition of Stamp Duty Land Tax on leases has worried many farming tenants. The CLA welcomes the announcements made to-day that will substantially reduce the tenant's paperwork.

"Firstly, it has been clarified that agreements for lettings entered into before 11th July 2003 will fall outside the onerous reporting requirement of SDLT (previously tenants would have needed to complete a long Land Transaction Return on the 7th year anniversary of the letting).

"Secondly, it has been clarified that Land Transaction returns are not required where there are variations to a lease that do not alter the rent or the length of the term.

"The Chancellor's announcement removes the need for a tenant to complete the Land Transaction Return just because there is a minor change of use over part of the let holding. This will restore many tenants' confidence when considering diversification. Without this rule, many tenants would have found themselves facing fines for failing to notify the Inland Revenue on long-standing tenancies and where diversification opportunities arose.

"We are also pleased that our lobbying has generated welcome steps to ease the huge compliance burden on farming tenancies. The Budget confirms that agreements for leases will be treated as leases "whenever they were entered into" which removes the problem of returns for agreements entered into before Royal Assent of FA 2003.

"Variations that extend the lease or increase the rent will be treated as variations and 'all other variations will be disregarded...whether the original grant of the lease was within the scope of Stamp Duty Land Tax or not'."

Adrian Baird, chief Tax Advisor of Country Land and Business Association (CLA),"Borrow now, a new land tax to follow"

"In response to today's publication of the Barker Report, the Chancellor's speech warns that he is looking to tax the "unearned increment in land values" when undeveloped land is granted planning permission.

"The Chancellor's choice of words is curious. Is he seeking to tax only the development gains? The phrase harks back to Henry George's full-blown land tax in Progress and Poverty published over a century ago when George proposed a tax on "land values" because these were "created by the mere presence of a community".

"This would go further than taxing development gains because infrastructure investment on or near a landlord's property that enhanced the value of the landlord's property and helped the community grow would be the subject of such a tax.

"However, honest taxpayers will breathe a collective sigh of relief that the Chancellor's draconian income tax charge on pre-owned assets, the announcement of which last December terrified many elderly donors and which is to apply from April 2005, will now not be imposed where the existing inheritance tax reservation of benefit rules operate.

"In short, the Chancellor has recognised that those who have played openly by the rules in the past, without using sophisticated tax avoidance schemes, should not be penalised.

"In addition, the pre-owned asset charge will not apply to many situations where assets are placed into joint ownership and then occupied by all the joint owners - a common practice where family members come back home to look after frail relatives and in family farming businesses where land is gradually transferred to the next generation.

"The imposition of Stamp Duty Land Tax on leases has worried many farming tenants. The CLA welcomes the announcements made to-day that will substantially reduce the tenant's paperwork.

"Firstly, it has been clarified that agreements for lettings entered into before 11th July 2003 will fall outside the onerous reporting requirement of SDLT (previously tenants would have needed to complete a long Land Transaction Return on the 7th year anniversary of the letting).

"Secondly, it has been clarified that Land Transaction returns are not required where there are variations to a lease that do not alter the rent or the length of the term.

"The Chancellor's announcement removes the need for a tenant to complete the Land Transaction Return just because there is a minor change of use over part of the let holding. This will restore many tenants' confidence when considering diversification. Without this rule, many tenants would have found themselves facing fines for failing to notify the Inland Revenue on long-standing tenancies and where diversification opportunities arose.

"We are also pleased that our lobbying has generated welcome steps to ease the huge compliance burden on farming tenancies. The Budget confirms that agreements for leases will be treated as leases "whenever they were entered into" which removes the problem of returns for agreements entered into before Royal Assent of FA 2003.

"Variations that extend the lease or increase the rent will be treated as variations and 'all other variations will be disregarded...whether the original grant of the lease was within the scope of Stamp Duty Land Tax or not'."

Forum Response: Corporation of London

Robert Finch, The lord mayor of the City of London,  [also senior commercial property lawyer with Linklaters], said: "The Chancellor's support for Real Estate Investment Trusts to improve the supply of rented property is good news.  It taps into City investment markets to bring much-needed funds for affordable housing.  It will also boost savings by establishing in the UK a new form of widely accessible investment vehicle ."

Michael Snyder chairman of the Corporation of London's Policy and Resources Committee, said: "I welcome the Chancellor's commitment to real growth in transport spending over the next three years. It is essential that London receives its fair share of this. Public transport in London needs new resources - not least a firm go-ahead for Crossrail - and I urge the Chancellor to make sure of this."

Forum Response: Nationwide

Stuart Bernau, Nationwide's executive director, said: "The Chancellor has missed an opportunity to make a real difference to a wide range of people,  from first time buyers to savers of all ages.

"This is surprising bearing in mind the government's stated aim of enabling all who aspire to own their home to do so, and the concerns the  government has expressed over the lack of personal savings.

"This is a real setback for savers. Everyone should ideally have three months' income saved for a rainy day, and cash ISAs are currently the perfect place to save this. But the reduced limits mean you won't be able  to put enough money in an ISA in a year to cover unexpected expenses,"

"Research conducted for Nationwide shows that 92 per cent of people are unaware of the government's planned changes with one in ten people even believing that cash ISA limits will be increased.

"Abolish stamp duty land tax for first-time buyers buying properties  valued at up to £150,000 Instead the government has frozen stamp duty. 

"Already three out of every four first time buyers have to pay stamp duty. By freezing the levels yet again when house prices are expected to rise by 9 per cent over this year, the government is ensuring that more and more people will be affected by this tax which was originally designed to affect only those buying the most expensive properties.

"Rising house prices and student debt are making it more difficult for many to buy their first home and as a result, the number of first time buyers is now at its lowest level for 20 years.

"Nationwide estimates that by the end of 2004, the typical first time buyer will pay around £115,000 for a house, and therefore have to pay £1,150 in stamp duty.

"To help first time buyers, Nationwide would like the threshold for Stamp Duty Land Tax to be increased to £150,000. This is just below the level where Stamp Duty would now begin if it had been index linked since the one per cent  tier for homes over £60,000 was introduced in 1993. Nationwide believes it is possible to provide relief for first-time buyers in a tax-neutral  way by considering a more graduated system of stamp duty that smoothes out the impact of this tax for people buying more expensive properties."

Forum Response: Institute of Directors

George Cox, Director General of the IoD, said:"Ultimately business wants to see public spending, taxation and regulation
brought under control. The Budget contains many encouraging features,
particularly by addressing bureaucracy.

"These are significant steps in the right direction to reduce red tape and bureaucracy. Indeed, in many ways they are quite bold. If they are implemented properly - and that is not without significant challenge - then it will make a real difference for business.

"However, if GDP growth fails to reach expectations or the tax-yield slips, the Chancellor will be forced by his own rules to raise taxation further next year. This remains our continuing concern after today's Budget."

Forum Response: British Retail Consortium

David Felwick, chairman of the BRC, said: “No one will be surprised that the Chancellor has delivered such a bland Budget.