3rd June 2015
Unsurprisingly, the Conservative Party is looking to consolidate their position during their honeymoon period and uncertainties surrounding Labour party’s search of their next leader by putting more flesh to the bones of their pre-election promises. With a majority mandate, the speech focuses on critical areas such as job security, social justice and devolution of powers.
From a tax perspective, the triple locking of income tax, VAT and NIC for five years coupled with the Government’s commitment to increase personal allowance is a very welcome move. This gives taxpayers some certainty and one less thing to worry about when the Autumn Statement comes around. Some consideration must be taken when it comes to Class 4 NIC for self employed as the Bill states individual, employee and employer NIC only.
Business wise, the various devolution Bills could be a catalyst for growth to increase productivity and efficiency in the northern and eastern regions of the UK. The benefits (or otherwise) may not be seen for a while yet although it could improve the business climate which could trigger more investments outside of London.
What does this mean for the 2nd Budget in July?
With income tax, VAT and NIC locked, could we see a rise in other areas such as capital gains tax, stamp duty and annual tax on enveloped dwellings? Possibly since no promises were made not to increase them.
A potential area for increase would be CGT as the current rates are below the basic and higher rate of income tax. For stamp duty, the long overdue reform of the rate bands for residential dwellings could be followed by a similar reform for commercial properties.
Finally, we could see another increase in the ATED charge although it may not happen so soon after the recent inflation busting increase in 2014’s Autumn Statement. Nevertheless, as the Government raised nearly 5 times what they had initially forecasted, owners of such properties should keep an eye out for December even if no increase is announced in July.
If you have any queries or want to find out more about how the recent developments will affect you, please do not hesitate to call your Ward Williams contact or Keng Cheong on 01932 830664 or firstname.lastname@example.org.