It is clear that the map of the UK taxation system will be torn up and re-drawn over the next few weeks. Thankfully the new Chancellor has looked at his calendar and avoided an England World Cup game, but is that as far as his foresight extends?
My predictions are:
1. Capital Gains Tax – a stepping up of the rates to 30% headline rate and then an eventual re-alignment with the 40% rate of income tax. Suitable reliefs for business assets will remain, but the effective on such assets will tend from 10% (on the first £2M of lifetime gains) to 20%.
2. Inheritance Tax – very little change.
3. Stamp Duty Land Tax – a higher band for houses in excess of £1M. This will pay for an on-going exemption for those “first time buyers”.
4. Value Added Tax – brace yourselves for 20% or possibly 21%!
5. Corporation Tax – little change, perhaps a small reduction.
6. Income Tax – a large increase in the personal allowances, tending towards £10,000, but with little change otherwise, the Government cannot be seen to let the higher earners “off the hook”.
7. National Insurance – relief for the employees, but pain for the employers.
8. Capital Allowances – some continued encouragement to invest in new plant, but no change to the effective lifetime rates.
9. A spending crunch!
I would warn you that if you ever hear me tip a horse then do not bet on it. Indeed, as I always lose, this narrows the field for you. But I would be interested to see what comes out and how close I am.
Any further suggestions, please send them to me!Talk to Barnes Roffe today