TAX EXPERT PREDICTS MEASURES TO BOOST THE TORY VOTE AHEAD OF THE SPRING BUDGET

As the March 6 Budget looms, tax expert Anton Lane, founder of Edge Tax, in Bristol predicts that tax cuts will be on the cards to shore up or increase support for the Conservatives as a General Election looms.

Anton, who has a specialism in complex tax investigations and works with clients globally, set up his Bristol-based company in 2012. He’d previously worked for many years with one of the world’s Big Four accountancy and consultancy firms.

With the Spring Budget on the horizon (March 6) he expects that the Chancellor will be looking for ways to encourage consumers to vote Tory when a General Election is called. 

“With a General Election due this year, the government will be keen to avoid disappointing its voter base where possible - and the level of taxation in the UK is currently at a record high.”

“We’ve also seen other announcements – such as the very recent creation of a Small Business Council – to ensure business owners feel that the current government takes the role of the SME sector seriously.”

Anton believes the areas to look out for in the Budget include:

·      Inheritance Tax Reform – these would be popular with traditional Tory voters and there are even suggestions the tax could be axed altogether. 

·      Dividend and Capital Gains Allowances restored - the amount investors can take from dividends or capital gains without paying tax is set to halve from April to £500 and £3,000 respectively. These ‘benefits’ have been eroded over recent years but I think we might see a last-minute pre-election respite. 

·      Capital Gains Tax - no mention has been made of any possible changes to this, though has been previous speculation of aligning CGT rates income tax however that would be an increase in the tax burden in an election year and so it is unlikely.

·      Life Time ISA reform - campaigners including Martin Lewis have been lobbying the government to reform the lifetime ISA. The cap of £450,000 on property purchases has remained unchanged since its introduction in 2017. Had this limit kept pace with the average increase in UK house prices, it would currently stand at approximately £560,000.

•Pensions -  we could see further announcements of a life time pension. The idea is the employee rather than their boss chooses the pension scheme that contributions go into and they keep the same "pot" even if they change jobs.
•VAT - the potential lifting of the VAT registration threshold above £85,000 turnover could support economic growth. Again unchanged since 2017, this has posed a hurdle for some businesses. Its potential transformation could nurture a more dynamic business environment. Fingers crossed. 

Anton said consumers and business owners need to be cautious about any reforms as they may not actually happen immediately – or at all. 

“With tax saving reforms, even if they are announced we have to ask when will we see them? This could emerge as the pivotal query for the Spring Budget as reports suggest that a '5-year tax-cutting plan' is under development, implying that measures might be introduced gradually over several years, contingent upon a change in government.  

“Naturally, with the prospect of a new government, attention will also be focused on Labour's shadow financial secretary.”

As a tax investigation specialist, Anton is particularly interested in how the Budget will tackle tax management and tax avoidance.

“I am not sure if it is a prediction or simply a wish, but in light of the tremendous pressure HMRC are now under due to previous tax avoidance clampdowns, they may introduce a 'settle now, check later' approach. It would clear some workload and get funds in the bank.”

Here is how Anton would see such a change working in practice: 

·      An appropriately qualified professional (maybe one registered with HMRC)  would submit a settlement in relation to a tax avoidance scheme along with tax calculations.

·      On submission the tax payer makes a payment or enters into a ‘time to pay’ arrangement, which if longer than 36 months, is accompanied by financial information.

·      The use of a qualified agent would ensure a level of quality and accuracy. The agent could themselves face penalties if they knowingly make inaccurate or false statements.

·      The regime has a period of time – perhaps 12 months - to be reviewed by a HMRC officer. This allows HMRC’s fancy computer to set up parameters to identify risks in disclosures. 

Anton said: “Apparently, the number of tax avoidance schemes have grown again so I would predict measures to further penalise enablers and promotors of such schemes.

“HMRC is likely to extend information powers at some point. I fear it won’t be long until they can collect more information from third parties as well as to widen what they can obtain when making enquiries or undertaking an investigation. 

“There is now a clear link between non-attendance at a meeting with HMRC and lack of cooperation.

“Many HMRC officers now seem set on taxpayers making voluntary restitution where HMRC are unable to assess. This is outside the framework of the law although if HMRC are looking to enable collection of taxes for longer periods the statutory time limits could be affected. It is felt unlikely this would happen without consultation.”

Anton set up Edge Tax, based in Hambrook, Bristol in 2012 and works with clients globally as tax specialists. For more information visit https://edge-tax.com