Ahead of Chancellor John Healey’s first Budget this week, Neil Grundon, Chairman of Grundon, gives his analysis of how it could affect the resources and waste sector.
Budget day is usually one of the most over-hyped days in British politics. Most of the big-ticket items have already been leaked and the loudest cheer is saved for the moment when beer duty gets cut, much to nobody’s surprise outside the Palace of Westminster.
The real stuff is always hidden away to be revealed at a future date when duty X goes up by a sliding scale of Y in 18 months’ time – usually just as the gas bill comes through the door. Or it’s a tax on something no one understands, like plastic or derivatives trading or my personal nemesis: Insurance Premium Tax (IPT).
Don’t get me wrong, when this tax slid its way through the door, I hardly noticed it, and it came with the handy explanation that because insurance is a service and services charge VAT, how could it be fair to not charge VAT on some services and not others?
Business buildings and commercial property insurance is currently subject to the standard rate of 12% IPT, and last year it cost us £400,000 in insurance premium tax alone to insure just two of our operations.
That £400,000 is the average cost of a brand new, standard pumping fire engine, which would come in handy, not least because our facilities – and those of our peers nationwide – seem to have to deal with the electrical equivalent of a Molotov Cocktail in every third load.
At a time when vapes and lithium batteries are causing waste-related fires almost every single day, it is more important than ever to have insurance in place – but having to pay a tax just for having that insurance cover seems, shall we say, excessive.
That same amount could also pay for a state-of-the-art fire suppression system for one of our transfer stations or Materials Recovery Facilities (MRFs), leaving said new fire engine busy hosing down another of our smouldering lorries on the side of the M25.
Alternatively, without paying IPT, we could save £4 million over 10 years and train up our own squad of firefighters in the manner of Red Adair (google him), ready to swoop into action as soon as a vape touches the transfer station floor, abseiling down chimneys, bristling with fire extinguishers.
Or we could use it to pay the increase in tax on employing people… don’t get me started on that one.
Of course, my Red Adair idea maybe a little fanciful, but it’s also true that faced with ever-increasing taxation – and don’t forget that the Prime Minister has refused to rule out more tax increases – businesses are being hit from all directions.
All the more reason to leave you with the reminder that, while we all pay IPT to insure our buildings against potential disaster, the UK government generally doesn’t buy commercial buildings insurance for the properties it owns and occupies.
Instead, we are told the Crown acts as its own insurer, having worked out that it is cheaper to pay directly for occasional damage or disasters rather than pay ongoing commercial insurance rates.
In other words, it is far easier for the public to pick up the tab through taxation than shell out for those pesky premiums – that doesn’t seem like a level playing field to me.
