It is always difficult to comment in the immediate aftermath of the Budget. The devil is always in the detail.
The main issue for our clients will be the tax hikes and pension relief restrictions being introduced. The current tax year will be a very busy one for me in terms of tax planning. We will see plenty of what I call the Greaves/Nicholson effect and an awful lot of high earners will be reducing their income to £99,999 or £149,999 per year (again depending on the devil in the detail).
Apart from tax planning, I also expect to be busy on company incorporations, particularly of professional practices. Part of the driver for this will be to mitigate the impact of higher rate relief loss on pension contributions.
The increase in company incorporations which will ensue will be interesting. At the beginning of the decade of financial mismanagement, Brown introduced the £Nil rate band of corporation tax which led to a surge in company incorporations predictable to everyone bar his Treasury Team, it seems. This dark age in our island’s history will perhaps finish with another surge of incorporations. Again, no doubt, this Government will see this as evidence of a return to health for the economy.
Unfortunately, these measures will make off-shore tax structures and arrangements more attractive to the highest earners. Despite their fine words about closing down such arrangements, the Government continue to do nothing. Indeed, they continues to be the industry’s most effective salesman.
The Government’s measures confirm one thing to me. Socialists have never understood small business. They never have done, and they never will do.
1 response so far ↓
Robert Archibald // April 23, 2009 at 4:27 pm |
Average public sector pay UP by about 3%, average private sector pay DOWN by about 3%. No Labour Government’s going to address this issue but, at some point, someone will have to. The question is, has ‘call me Dave’ got it within him to do a ‘Maggie’?
As for Chris’s comments about HMRC being stretched too thin, might I suggest we need a substantially less complex tax system which requires support from even less staff.
And don’t get me started on ‘welfare benefits’!