Now the dust has settled on the election and the new Chancellor, Rachel Reeves, starts to find her feet – (and tries to find some money in the coffers!), there are likely to be changes to the tax regime in the not-too-distant future.
Their manifesto intimated that there would be no changes to Corporation Tax, but VAT on private school fees would be introduced. This would likely add 20% to existing fees. Paying fees in advance may not work as legislation may counteract this move, so the effectiveness of doing so cannot be guaranteed.
Income tax thresholds would remain frozen until 2028. There were also plans to change employee rights – great for the employee – but an additional burden and cost to the employer! Whilst they pledge to support small businesses, this works the opposite way.
Significant changes to Inheritance tax and pension rules were also mentioned.
At the present time it is a case of wait and see, but unfortunately it looks like there could be significant “tax raids” on estates and pension funds. If you are contemplating pension payments to top up any unused elements of your annual allowance, now may be a good time to do it, rather than wait until after her first budget.
Please feel free to contact us if you need any advice or assistance.
