Tax Day – what could we see ahead?
Tuesday, 16 March 2021
On Budget days, we usually see the publication of consultations and ‘calls for evidence,’ which give us an insight into the Government’s plans for possible future changes.
However, this year has been shaped a bit differently by the Government and we now have Tax Day, on 23 March, to look forward to.
On Tax Day, the Government will publish a number of tax-related consultations and calls for evidence. We’re told the delay is to ‘allow for more transparency and scrutiny’ and it’ll give tax professionals, such as ourselves, better opportunity to feed into the consultations and policy discussions.
We know that none of the announcements will require legislation in the next Finance Bill, so we expect these consultations to cover legislation that will be introduced in Finance Bill 2022 or later.
We’re hoping to get an insight into what tax changes we might expect to see in the future and, therefore, the opportunity for businesses and individuals to plan for them.
We expect they’ll include post-COVID revenue raising measures, but we’ll have to wait and see. They’ll align to the Government’s 10-year strategy which is aimed at improving the resilience and effectiveness of the UK’s tax system.
One area I’d expect to see consultation on is capital taxes.
Ahead of the Budget, there was huge uncertainty on whether we’d see changes to the capital gains tax rates. Whilst nothing was announced, I wouldn’t be surprised if we saw a consultation paper on the future of this tax. Simplification could potentially see a move towards aligning the rates more closely with income tax or restricting the range and value of exemptions.
There’s also been talk of changes to the inheritance tax regime since the All-Party Parliamentary Group published their report on the Reform of Inheritance Tax, in January 2020. In recent months, the Wealth Tax Commission also published its report which concluded that the UK could benefit from introducing a wealth tax. I’ve not seen a wealth tax in my lifetime, in the UK, and this would be a significant change to the current tax system. It’s suggested that it would be a one-off tax. Whilst neither of these proposals are government-backed, it wouldn’t be surprising if they were the subject of a consultation come Tax Day.
The 23 March Tax Day is flagged in the diary and we’ll provide further updates once we know more.
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