Hello everyone

So with Brexit out the way, we have a new budget. The date for your diary is 11 March. With any budget we are expecting a few surprises. Being the first budget for Borris and the first since Brexit, will the government go for some headline changes or will they keep a steady ship for 2020?

Look out for a budget update nearer the time, but planning ahead here are some of the possible changes to look out for:

National Insurance

The Tories have hinted at aligning the National Insurance and Income tax threshold. This is likely to be an increase in the starting threshold for paying National Insurance, which would mean a tax saving for the majority of workers.

Entreprenuers’ relief 

The entrepreneurs’ 10% tax rate has proved hugely popular, so much so, the government didn’t expect so many individuals to claim it! So like all “popular reliefs” that government has already restricted it (changing the ownership period from 1 year to 2 years from April 2019). They might not stop there…and more changes could be on the way.

Inheritance Tax (IHT)

Mumblings around IHT have become louder and louder over the past few years. We’ve had proposals to scrap it. Proposals to restrict the generous reliefs (business property relief and agricultural property relief) and more recently we’ve had proposals to change it to a gift tax regime. Whilst in the grand scheme of things IHT only brings in a small portion of tax receipts, it is still seen as a tax on the rich, so any proposals to change it would presumably be made with voters in mind!

“Pension Simplification”

Do you remember the term “Pension Simplification”? For a while the government looked like they were doing a decent job on this – abolishing compulsory annuities, bringing in the lifetime allowance and annual allowances, which worked reasonably well for a while. Then the tinkering started – reducing the annual allowance by bringing in a form a tapering for example. The complex calculations for determining the allowances for high earners have meant a large number of individuals (especially high earning public body individuals) have been hit with unexpected tax bills. Will the government bring in further changes or keep the status quo?

Look for our budget update neared the time!

TOA