The Spring Budget on 3 March was not the end of the taxing story.
The run up to the March Budget was accompanied by much press speculation about changes to capital gains tax (CGT), inheritance tax (IHT) and pension tax relief. The first two had been the subject of reports from the Office of Tax Simplification (OTS) while the Treasury has issued a consultation paper on the third. When Budget Day arrived, the trio received almost no mention from the Chancellor.
Attention then turned to ‘Tax Day’ – 23 March – when the Treasury had promised to publish a raft of documents that in earlier years would have come out alongside the Budget. The delay was designed to allow for more transparency and scrutiny by tax professionals. Once again, there was disappointment at what was missing. However, some indications of the direction of travel emerged from more than 30 sets of consultation papers, calls for evidence, summaries of responses and other documents issued on 23 March:
- Inheritance tax From 1 January 2022, IHT tax return procedures will be simplified so that “over 90% of non-taxpaying estates” will no longer have to complete IHT forms when probate or confirmation is required. If you have ever been involved in completing such paperwork, you will appreciate how much time this will save many executors.
- Holiday lets It has become increasingly common to classify holiday lets as being subject to business rates, often with the consequence that Small Business Rates Relief meant no rates were payable. This loophole is to be closed, with account taken of the actual number of days a property is rented when determining the rate bill.
- Timely payments One of the features of tax policy in recent years has been an acceleration of when tax becomes payable – the recent changes to CGT on residential property were a classic example. Under the heading of ‘timely payments’, the Treasury is beginning “…to explore the opportunities and challenges of more frequent payment of income tax within Income Tax Self Assessment, and of corporation tax for small companies, based on in-year information”.
The absence of any major announcements on CGT, IHT and pensions could mean these will appear in the autumn Budget, leaving a window of planning opportunities until then. If you would like to discuss anything with our Financial Advisers please contact us on 0114 266 4432 or [email protected]