Tax Rise’s for All & Maybe More!
Statement here, announcement there, and now we are just over 2 weeks away from a Budget, 17th November.
We already know that the 1p reduction in income tax and the proposed NI increase have both been rolled back, but the UK has a massive hole in its finances, all the governments it own doing and it is time for people to pay.
Capital Gains Tax (CGT)
Changes to the rate/band could be in the wind, it would seem like one of those taxes that does not affect most, but could bring in a sizable amount of additional tax. Will the government be brave enough to talk about applying a new rate of CGT on the sale of your main home (maybe not)?
Mainly seen as a tax on the very rich, but can affect far more people than everyone realises, even just freezing the starting point of IHT will have an impact. However, lowering the starting band or introducing some clever new structure within the current system, could see more tax paid in this area.
Has been reduced over the years and could now be in danger of being abolished altogether.
Could we see for the first time in many years, an increase in the basic rate of tax? If not, we will definitely see a freezing of allowances, so more people are pulled into higher tax bands, therefore paying more tax.
Pension Tax Relief & Allowances
Currently the government pays you to save into your pension, so for every £ you put in, you get out either 20p (20%) or 40p (40%) depending on your highest tax rate. You also have an annual allowance setting the maximum you can put in your pension in any one tax year, while still benefiting from tax relief. You can of course put more in, but no further tax relief is given. Reducing one/both of these could net billions for the government, but means you lose out in growing your income for retirement.
Now this one is even more contentious, but it is just possible that taxes, such as internet sales tax or long-term care tax, could be on the cards. In the minds of many, these will not be seen as a direct tax affecting themselves, but they will increase prices to all of us, through increased retail/service delivery costs.
Other areas the chancellor could consider are VAT, IPT, Fuel Duty etc. but many of these taxes we all feel immediately and will push up the cost of living.
We will be listening carefully on the day and provide you with an impact announcement very soon after the Budget, so keep an eye on your inbox.
As an old saying goes:
“It's Time to Pay the Piper”