Chancellor George Osborne delivers his Budget speech tomorrow with many tax commentators believing there is not much room for manoeuvre bearing in mind the current financial position of the UK. However I diasagree with the commentators and predict that there will be changes as indicated by the Office of Tax Simplification early this year.
I fully believe there is a strong chance that Tax and National Insurance could be merged. This would potentially mean tax savings as you would only have to pay Tax and no National Insurance. The government set up the Office for Tax Simplification (OTS) last year and it is expected that some concrete steps towards streamlining the tax system will be put in place and I believe this is one of them.
Furthermore I am predicting the following 5 items to appear in tomorrow’s budget:
1. IR35 - I believe partnerships will be targeted as HMRC look to clamp down on further 'disguised employments' to avoid rising National Insurance costs
2. Non Domicile/Non Residents - With no concrete rules in place to determine ones residency surely now they must introduce a statutory test!
3. NIC on benefits - an increase of NIC on benefits in kind
4. Stamp Duty - Possibly further anti avoidance legislation to be introduced
5. Inheritance Tax Squeeze - This has already been documented by the OTS as they reported "On the basis of the low number of estates caught by IHT and the useful but relatively low revenues [after reliefs] that it raises, we consider that a more appropriate approach may be to review the whole of IHT rather than to consider individual IHT reliefs"
Overall I believe this year’s budget could see the biggest tax changes we have seen for the past few years and I will be summarising all the key points in tomorrow’s blog.
Please feel free to contact me with any questions mitch@ljd.uk.com
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