Rishi Sunak is expected to deliver his Budget in November 2020, and it has been widely speculated in the press recently that he may take this opportunity to raise taxes in order to pay for the extensive COVID-19 support measures.
There are concerns that there could be an increase in Capital Gains Tax to align with Income Tax rates, or a significant increase in Corporation Tax rates. It has also been speculated that there could be changes to the generous pensions tax relief, as well as changes to Inheritance Tax.
Additionally, the Capital Gains Tax system is currently subject to a full review by the Office of Tax Simplification. Their consultation ends in October so whilst it is possible their report and recommendations could lead to a more comprehensive overhaul of the tax, the timeframe would be tight for it to be included in this Budget. If the report is still awaited then this may be a reason for the Chancellor to leave Capital Gains Tax alone until the next Budget, although a simple rate rise cannot be ruled out.
Business owners and individuals will no doubt be concerned.
However, there is often speculation ahead of any Budget, and this is no different. Some commentators believe now is not the right time to raise taxes, at a time when the UK Economy is in the midst of an ongoing global pandemic, and Mr Sunak has reportedly reassured his party that the Budget will not be a "horror show of tax rises with no end in sight". Time will tell, and one person’s “horror show of tax rises” may be another’s “fiscally responsible debt reduction”!
Whatever happens in the Budget, there are likely to be tax changes that will impact UK individuals, businesses and their owners.
Business owners who are concerned there may be an increase in CGT rates may wish to seek to accelerate transactions already in progress. However, it is possible that any planning undertaken now could result in unexpected tax implications arising from Budget changes, and such implications could be positive or negative dependent on the circumstances.
If you'd like to discuss your tax position, and how the budget might affect you, then please arrange a consultation with a member of our tax team.
The 2020 Tax Saving Guide
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