London & Capital Wealth Management’s Post

I advise on tax, not politics, but here’s an ‘own goal’ in the making: Labour has refused to rule out increasing capital gains tax if they win the general election. Nothing in the party's manifesto requires an increase in CGT but while the party has pledged not to raise income tax, National Insurance and VAT, its refusal to rule out other levies has raised concern among some commentators. People do react to tax changes, and an increase in capital gains tax could lead to a £3bn drop in revenue for the Treasury, according to HMRC figures. The data suggests that a 10 percentage point increase in the higher rate of CGT could result in a £170m fall in tax take in 2024/25, followed by a £1.1bn drop in 2025/26 and £2.1bn the year after. for their part, the Liberal Democrats have already promised to double rates for higher earners, estimating it would raise £5.2bn a year in 2028/29, all of which makes a nice departure from all the savings everybody expects form curbing tax avoidance and catching tax evaders…

It’s the budget today and it looks like personal tax cuts will take centre stage, headlined by a 2p cut to National Insurance. The show starts at 12.30… Here’s an interesting chart to share on the day of the budget. The total ‘cost’ of every major tax relief. They’re not really ‘costs’ though are they - it’s not like the government is missing out on something it’s owed. Still, the capital gains tax exemption on the sale of your main home means HMRC misses out on around £37bn a year. HMRC says that in total the 104 non-structural tax reliefs ‘cost’ £204bn. Non-structural tax relief statistics (December 2023) - Updated 17 January 2024: https://lnkd.in/eF_esgZV

Simplified tax system could boost UK finances Experts have suggested that the Government could provide a long-term boost to Britain's public finances by simplifying the tax regime. Labour, which has vowed not to raise the rates of income tax, National Insurance or VAT, has said it could raise about £6bn by narrowing the difference between what HMRC actually collects and what it is owed. Experts say ministers could achieve this by simplifying the tax system, with such a move reducing the risk of businesses and individuals mistakenly underpaying tax. Helen Miller, deputy director of the Institute for Fiscal Studies, argues: "Simplification in and of itself shouldn't be the goal," saying: "We have to have some complexity in order to achieve other aims such as redistribution. But right now we have too much complexity in order to achieve those aims." 

Simplified tax system could boost UK finances Experts have suggested that the Government could provide a long-term boost to Britain's public finances by simplifying the tax regime. Labour, which has vowed not to raise the rates of income tax, National Insurance or VAT, has said it could raise about £6bn by narrowing the difference between what HMRC actually collects and what it is owed. Experts say ministers could achieve this by simplifying the tax system, with such a move reducing the risk of businesses and individuals mistakenly underpaying tax. Helen Miller, deputy director of the Institute for Fiscal Studies, argues: "Simplification in and of itself shouldn't be the goal," saying: "We have to have some complexity in order to achieve other aims such as redistribution. But right now we have too much complexity in order to achieve those aims." 

🚨 Upcoming Tax Changes Alert! 🚨 With the new Government and the upcoming budget set for mid-September, we are expecting significant tax changes. Here are the key updates likely to be confirmed: 🔹 VAT on school fees   🔹 Changes to non-Dom taxes   🔹 Adjustments to stamp duty for non-UK residents However, Labour has yet to address certain areas of tax, and I anticipate changes to: 🔸 Inheritance tax   🔸 Capital gains tax Given these potential shifts, strategic planning may be crucial before the budget is finalised to optimise your tax position under the current tax regime. Stay tuned for more updates on this from me! In the meantime, feel free to reach out if you have any concerns or need guidance on how to navigate these upcoming changes. #TaxChanges #Budget2023 #TaxPlanning #InheritanceTax #CapitalGainsTax #VAT #NonDomTax #StampDuty

Watch this video to find out more about Self Assessment tax returns and estimated underpayments in your tax code. Visit GOV.UK to find out more: https://buff.ly/3vtO4gf HMRC is the UK’s tax, payments and customs authority. We collect the money that pays for the UK’s public services and help families and individuals with targeted financial support. You can use social media for help with general queries relating to any of HMRC’s products and services: Twitter: https://buff.ly/39pDwUt Facebook: https://buff.ly/3LeZzi3 0:00 Introduction 0:24 Check to see if the figure is correct 0:44 If there is no underpayment for earlier years 0:53 If there is an underpayment for earlier years 1:00 estimated tax you owe 1:14 correct amount 1:33 does not count as income tax 1:45 tax due 23/24 1:54 Further help and supporthttps://buff.ly/3RVrdoe

For the 2023/24 tax year, the Self Assessment threshold for individuals taxed through PAYE only, will change from £100,000 to £150,000.    However, you may still need to submit a tax return even if your PAYE income is below £150,000 but you meet other criteria. From the 2024/25 tax year onwards, the income threshold to complete a tax return for PAYE only taxpayers will be removed. For more information, please see our linked post. #selfassessment #taxreturn

Last week’s Federal Budget continued to highlight that the numbers do not lie and tinkering with bite-size pieces of tax reform is not tax reform at all. Over the last 20 years, personal income tax collections are doing the heavy lifting going from 47% to 53% of total tax revenue collections even with Stage 3 cuts in place. Corporate tax collections have been fairly constant at around 21% and are likely to remain at those levels through to 2028. GST collections have much the same story and have been bubbling along at around 15% of revenue collections. So despite the tweaks and integrity measures over the last 20 years and the Stage 3 tax cuts, the increasing tax burden falls on personal income tax. The need to alter the unsustainable course of Australia’s revenue collection base and spending was reflected by the AFR’s Tom McIlroy in this article: https://lnkd.in/gNVkMGHz

🔍 Potential Changes to Capital Gains Tax After the Election The Labour Party’s recent confirmation that there will be no rises in income tax or National Insurance has sparked speculation about other tax adjustments. While capital gains tax (CGT) hasn’t been explicitly mentioned, it’s worth considering. CGT currently contributes just 1.3% of all tax receipts, so even significant changes won’t greatly impact government finances. In recent years, we’ve seen reductions in the annual CGT exemption (now at £3,000) and adjustments to business asset disposal relief. Looking ahead, some speculate that CGT rates could align more closely with income tax rates. However, no official proposals have been made. We’ve already seen an increase in the number of solvent liquidations and I suspect this will be an area to keep an eye on.

Two separate £1,000 tax allowances for property and trading income were introduced in April 2017. If you have both types of income highlighted below, then you can claim a £1,000 allowance for each. #PropertyAllowance #TradingAllowance