The Chancellor’s first Budget of this Parliament
The Chancellor delivers his first Budget of the new Government on 8 July. What would I like to see, and what do I expect to see?
The first Budget of a new administration is often technically-detailed, and may contain bad news so as to get it out of the way as soon as possible. But with the Budget so close to the General Election, I doubt that the Chancellor will have had time for too many changes – we’ll have to wait until the Autumn Statement and Spring 2016 Budget for that.
What would I like to see? I’d like to see further encouragement to businesses, particularly SMEs and fast-growth companies. A promise to retain CGT Entrepreneurs’ Relief for the lifetime of this Parliament would be welcome, as would clarification on the rules concerning IHT Business Property Relief. I’d also like to see a replacement for the short-lived Patent Box regime, and further encouragement for investment in plant & machinery.
What do I expect to see? The Chancellor has already committed to not raising the rate of income tax or VAT, but there are other ways to raise taxes. These might include:
- A continued focus on tax avoidance – A DEAD CERT
- A new banking tax – I’m 50:50 on this – a year ago I would have said this was very likely, but with at least one major bank threatening to leave the UK I think it would be a risky move
- A change to tax short term gains as income rather than as capital – LIKELY
- Income tax higher rate threshold to be frozen – VERY LIKELY
- More taxes on expensive properties – a Mansion Tax other than by name – LIKELY
We will have to wait and see, and I will be posting a full analysis after the Budget.