With less than three weeks to go to the Budget, the Swindon accountants here at Optimum are predicting the Chancellor could make big changes affecting the town’s businesses.
Rishi Sunak is widely believed to be considering tax rises, to help fund government support given to businesses and people during the pandemic. The total bill for economic support so far is more than £280 billion, comprising initiatives such as the furlough scheme and SEISS payments for the self-employed/partnerships.
We believe the Chancellor has set his sights on tax rises to help recoup some of the expenditure. All will be revealed in the Budget on March 3.
One target could be Business Asset Disposal Relief (previously called Entrepreneurs Relief), available to sole traders and those in a partnership who are selling all or part of a business.
If this is an area the Chancellor is looking at, and disposing of business assets is something business owners are considering, then time really is running out to do some planning before the end of the financial year.
Other options that the Chancellor is rumoured to be considering include a wealth tax and changing the rate of VAT.
However, we doubt VAT will be raised as this would impact people’s level of spending and confidence levels, which could in turn have a detrimental effect on the economy – but we can’t rule anything out.
Capital Gains Tax may come under the spotlight, if the Chancellor looks to making the rates here more in line with income tax rates. Similarly, the rate of Dividend Tax may be increased to make it more equitable with income tax levels paid by employees.
On the plus side the Chancellor may also look at extending the Stamp Duty Land Tax holiday for home buyers, which is due to come to an end on March 31.
Overall, we will be watching this Budget with more than the usual degree of interest!
At Optimum Professional Services, based in Swindon, we specialise in accountancy (tax planning, audit, business planning, bookkeeping and payroll); and legal services (conveyancing, wills and probate). Please get in touch to find out more.