‘With a Conservative government now confirmed, higher earners will be trying to do their sums to work out whether they are a winner or loser,’ says Tim Stovold, head of tax at accountants Kingston Smith. ‘They will take comfort from the promise that the highest rate of tax will not increase from 45%, but will be losing out on tax relief on their pension contributions if they earn more than £150,000. The £1m inheritance tax exemption for main residences will help soften the blow of higher taxes but for most this saving will be many years away.’
‘Non-domicile status will stay but increases in costs of opting in to the remittance basis are likely,’ said Andrew Watters, director at Thomas Eggar. ‘Higher penalties are being introduced for those who get their tax planning wrong with draconian penalties if the planning involves offshore entities.
However, the largest worry for many business people will be an ongoing uncertainty as to what they can and cannot legally do. At an international level, the new diverted profits tax legislation has left many businesses scratching their heads and the large accountancy practices rubbing their hands at the likely bun fights that will ensue. At a more local level, announcements on the advance payment notice regime, initially introduced as suitable for the most aggressive schemes, suggest it is being extended to cover what many would view as the legitimate use of legislation introduced to provide tax incentives to invest.’
‘What the UK really needs right now is stability, not least in the area of taxation,’ Ben Jones, partner at Eversheds, said. ‘The Conservatives must avoid dramatic changes to the UK tax system and continue tax policies aimed at stimulating the UK economy and inward investment.
‘Of course, the deficit reduction plan and future spending needs to be funded and it is proposed that part of this funding will come from further anti-tax avoidance measures. The coalition government was very active at tackling tax avoidance. As the Conservatives continue with this programme, it is hoped that this will be done through targeted and well considered measures that avoid undue compliance and administrative costs for innocent businesses and do not act as a deterrent to foreign investment into and trade with the UK.’
Meanwhile, George Bull, senior tax partner at Baker Tilly, writing in this week’s Tax Journal, has warned that the government’s ‘triple lock’ of commitments not to increase VAT, income tax or NIC ‘will quickly become handcuffs for the chancellor, unless everything goes to plan’.
‘With a Conservative government now confirmed, higher earners will be trying to do their sums to work out whether they are a winner or loser,’ says Tim Stovold, head of tax at accountants Kingston Smith. ‘They will take comfort from the promise that the highest rate of tax will not increase from 45%, but will be losing out on tax relief on their pension contributions if they earn more than £150,000. The £1m inheritance tax exemption for main residences will help soften the blow of higher taxes but for most this saving will be many years away.’
‘Non-domicile status will stay but increases in costs of opting in to the remittance basis are likely,’ said Andrew Watters, director at Thomas Eggar. ‘Higher penalties are being introduced for those who get their tax planning wrong with draconian penalties if the planning involves offshore entities.
However, the largest worry for many business people will be an ongoing uncertainty as to what they can and cannot legally do. At an international level, the new diverted profits tax legislation has left many businesses scratching their heads and the large accountancy practices rubbing their hands at the likely bun fights that will ensue. At a more local level, announcements on the advance payment notice regime, initially introduced as suitable for the most aggressive schemes, suggest it is being extended to cover what many would view as the legitimate use of legislation introduced to provide tax incentives to invest.’
‘What the UK really needs right now is stability, not least in the area of taxation,’ Ben Jones, partner at Eversheds, said. ‘The Conservatives must avoid dramatic changes to the UK tax system and continue tax policies aimed at stimulating the UK economy and inward investment.
‘Of course, the deficit reduction plan and future spending needs to be funded and it is proposed that part of this funding will come from further anti-tax avoidance measures. The coalition government was very active at tackling tax avoidance. As the Conservatives continue with this programme, it is hoped that this will be done through targeted and well considered measures that avoid undue compliance and administrative costs for innocent businesses and do not act as a deterrent to foreign investment into and trade with the UK.’
Meanwhile, George Bull, senior tax partner at Baker Tilly, writing in this week’s Tax Journal, has warned that the government’s ‘triple lock’ of commitments not to increase VAT, income tax or NIC ‘will quickly become handcuffs for the chancellor, unless everything goes to plan’.
