Apart from the pre-published clauses for the upcoming budget, what else can we look forward to?
George does seem to be off-track in paying down debt and making progress towards a balanced budget. If he continues to let the multi-nationals drag UK earnings offshore, without contributing to the UK tax take, then he will have to turn the screw on lesser mortals, those with less leverage in the facing down the HMRC game.
There are whispers: a reduction in Entrepreneurs’ relief, reductions in income tax relief for the higher rate taxpayers making contributions into pension schemes. There is even talk that he is considering a reduction in the 25% tax free lump sum that can be drawn from pension pots on retirement.
We are already facing a number of changes to the taxation of buy-to-let landlords, including the 3% increase in SDLT for buyers of residential buy-to-lets and second homes, and a multitude of restrictions in higher and additional rate tax relief. Add to these the changes in dividend tax and the outlook for smaller businesses is bleak, if you want to reduce tax. Most of us, it would appear, are going to suffer a drop in take home earnings unless we can generate more pre-tax income.
However, these changes do offer professional advisors an opportunity to step in to ensure that any client tax increases are kept to a minimum. It is clear that the old tax planning chestnuts: incorporate your business to save NIC, heavily geared property portfolios and so on, will need to be reviewed. No doubt new opportunities will surface once we have the full text of the Finance Bill 2016 in plain sight.
Watch this space…
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