
As the Autumn Budget approaches, the Government has pledged that it will “make the tax system fairer” and avoid raising taxes on working people and certain businesses.
The Government has said that it will not raise:
- Income Tax
- National Insurance (NI)
- Corporation Tax
- VAT
While Corporation Tax is not levied on individuals, the fact that the Government is not changing it may be good news for consumers.
Freezing VAT and Corporation Tax should keep a handle on price rises as businesses will not need to pass on additional costs to clients or customers.
This is a significant announcement, given that the Government seeks to make up a substantial shortfall in public finances.
However, recently rumours have been spreading about the possibility of employers’ contributions to NI being increased.
This increased employment cost could have an impact on many businesses’ bottom lines.
What does this mean for businesses?
The budget is good news for businesses, particularly regarding VAT and Corporation Tax but potential employment law changes could offset these.
With additional employment taxes to be paid, businesses may have less ability to reinvest in growth – working against the priority of the Government to increase growth in sectors such as sustainable technology.
How will this impact individuals?
The Budget will likely come as a relief to individuals who pay only Income Tax and NI, this includes most workers whose only income source is a regular salary or hourly pay.
Individuals with additional assets such as property, private pensions, dividends or investments may reap less of a benefit.
With the Government seeking to levy additional income through taxes, these individuals will likely face an increased tax burden on their wealth through a rise in Capital Gains Tax (CGT), for example.
It is, therefore, important for those with high-value assets to engage promptly with proactive tax planning.
Want to optimise tax liabilities on your assets? Contact us today.