A Budget for the sunny uplands of a post-Brexit Britain?
Chancellor Philip Hammond will deliver on Monday 29 October the most keenly watched and important Budget of his career.
It will be a Budget delivered through the lens of Brexit and will set out the Government’s vision for what the UK might look like once we have left the European Union.
Laurence Parry, Tax Partner details: “With 29 March drawing closer we would expect the Chancellor to deliver an upbeat Budget that gives a flavour of how the UK will look post-March 2019 and one that sends a message to the country of the Government’s future intent.”
Whilst big policy announcements might be missing, tax partners, Laurence Parry and Daniel Grainge anticipate the following.
The introduction of a digital tax
“The corporation tax paid by some of the world’s largest digital companies has once again hit headlines with Ed Sheeran earlier in October reportedly paying more tax in the UK than Amazon and Starbucks,” says Laurence.
“The Government is under increasing pressure to act, and we expect the Chancellor will announce a consultation on a new digital tax whether based on turnover from UK customers or some other measure. We don’t expect a blunt transaction tax.”
Buy to let
Daniel Grainge, a partner specialising in private client tax says: “A further move to make houses more affordable for owner-occupiers was raised at the Conservative party conference earlier this month with the potential for landlords to be offered capital gains tax reliefs if they sell to tenants. We expect to see more detail in the Budget.
“This is potentially an attractive position for property investors looking to realise the value of their investment. The Chancellor would hope that this measure might increase supply and so reduce prices; however, it is difficult to see how this will significantly ease our housing crisis.”
Agricultural Property Relief and Business Property Relief
“Agricultural Property Relief (APR) has long been rumoured for reform,” says Daniel. “It is a valuable relief for farming families, but there is a feeling that the relief should not be used for investors owning land. Given, however, that many landowners will be Conservative voters we would be surprised if reform were announced on 29 October.
“But we would not be surprised to see reform to Business Property Relief (BPR), with the relief removed from AIM-listed shares.”
“Again, the reform of inheritance tax has long been promised by the Conservative party but not actioned,” says Daniel. “It is difficult to see any meaningful change being announced this time around, but we would not be surprised if the rules surrounding gifts were eased.”
What would we like to see?
“There is one reform we and many employers would welcome,” says Laurence, “and that is the harmonisation of national insurance and income tax. The two are increasingly blurred. Combining the two would save employers, their advisers and the Treasury considerable time and money.
“But, just as Heathrow’s third runway and HS2 are proving challenging, we think this might be a step too far for a government consumed by Brexit.”
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