Budget 2021 – What’s Next For Tax?
To conclude our series of Budget related articles, it would be remiss of us not to look to the future. Chancellor, Rishi Sunak, was quite clear as to the likely cost of the pandemic and therefore a day of reckoning will come. However, Mr Sunak is seeking to find a balance between re-igniting the economy and plugging the financial black hole. So, who and what is on the radar?
In the Budget, it was noticeable that the Chancellor targeted Corporation Tax citing that, as businesses had received most of the financial support such as furlough, grants, loans etc, then they should bear the cost when things revert to normality, whatever that may look like.
Due to the corporate tax focus, the anticipated attack on wealth did not materialise. The Conservative government’s dilemma is that an attack on wealth might be seen as a direct threat to its voting heartland, yet it does seem to be the only way that the UK can make a material dent in its Budget deficit.
With Capital Gains Tax (CGT) and its associated reliefs under significant review with a series of past and forthcoming HMRC consultations, some of the press speculation surrounded a one off wealth tax, targeted at the wealthiest in our society. Options considered appear to have been an annual wealth tax to eventually replace Inheritance Tax (IHT) to a one off wealth charge to more immediately reduce the impact of the pandemic.
Ultimately, tax can only either come from businesses or individuals. It seems untenable currently that Income Tax rates will rise significantly and with the Corporation Tax rises already announced, it does seem that the remaining measures will seek to target anti avoidance much harder than before along with a more strategic approach to taxing wealth more “fairly”.
For our EQ Taxperts, this will require regular dialogue with our hard working clients to allow them, with our support, to plot their way through the choppy waters to come – watch this space!
If you would like to discuss your circumstances and plans for the future, our EQ Taxperts would be happy to offer advice and support. Get in touch by calling one of our offices or email [email protected].