David Pointer of Open Tax Consultancy comments on today’s budget.
“Last year on taking office the Government agreed a new path for making changes to the tax code, to start the process a draft Finance Bill was published in December 2010 for consultation. We therefore already knew many of the Budget changes including some of the proposed allowances and tax rates for income tax and corporation tax”.
David went on to say that new headlines as the Chancellor sat down included the reduction of corporation tax by 2% rather than 1% with effect from April followed by 1% reductions after that. Also the suggestion of a combination of income tax and national insurance into one tax, which is long overdue as is the introduction of a statutory residence test mentioned by Mr Osborne.
The Chancellor’s suggestion that the 50% rate of tax may have a limited life was welcome but received with a good spoonful of skepticism. A 10% discount on inheritance tax for people leaving 10% of their estate to charity is an interesting addition as is the cut in the tax on petrol which is now a huge burden on the household budget.
Moving forward the new Office of Tax Simplification is suggesting more wholesale changes to many areas of taxation including the taxation of small business and the future of small burdensome, outdated tax reliefs.
With the firm background need to balance the country’s books and address the dreaded deficit David added “I really believe we should expect further more regular announcements on perceived tax avoidance, continued reform of the corporate tax system which is now out of kilter with other taxes and perhaps headline grabbers -and vote winners – such as the higher taxation of UK non domiciled individuals”.
David Pointer is a tax specialist working in central London, he runs Open Tax Consultancy and helps high net worth clients with sophisticated tax compliance and planning needs. If it would be helpful to meet David then please get in touch.
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