I listened to a technical webinar at the end of last week presented by Prudential and their senior political and technical staff here in the UK. Following the cancellation of the Budget (was this previously a pre-Budget debate?) they were discussing what taxes might change when and the politics behind it.
Basically, it is a trade-off between what value any new tax might have (how much will it raise for the State?) balanced against the potential political damage any specific tax change may do.
Thankfully, on this basis a lot of the potential tax changes were discussed and dismissed as unlikely. I don’t think this is the end of the matter, we will need additional tax for the State to pay for the support during the pandemic and strengthen our recently exposed weak spots, the NHS, residential care, social services etc.
We will also need more money to kick start the economy and help us deal with Brexit, fudged deal, or no deal. As this is the case, when the economy is recovering, and the consumer is spending freely again (post vaccine?) we will see changes to the tax system.
Given the state of our economy and the outlook, the only thing we know with certainty is the tax position and legislation we have in place right now. If you have the means, why not take advantage of the tax reliefs and planning opportunities that are available today?
It makes good sense to press on with any beneficial planning now using what reliefs are available today, we know the rules now. For example, pension funding with higher rate tax relief within the pension contribution limits we have currently.
If you would like to discuss your own personal situation, please get in touch.
Steve Speed
29/09/2020