Biggest Peacetime Deficit: Tax Rises
The UK’s budget deficit is set to increase to a level never before seen in peacetime, as government borrowing to cover the coronavirus cost burden skyrockets to the largest level since the Second World War. As a result, the government is expected to spend more than £1 trillion for the first time ever this year, taking public expenditure to more than half the national income.
Tax Rises
Recouping this huge sum is something which both Prime Minister Boris Johnson and the Chancellor Rishi Sunak have confirmed, inevitably, will have to lead to tax rises. The big questions are of course to whom will the tax rises apply and how?
As expected, many ideas have already been raised by various commentators including national insurance on dividends, equalisation of capital gains and income tax, removal of Business Property Relief for inheritance tax purposes, and wealth/estate taxes on properties. Any such change(s) will have a seismic effect on the finances of clients.
Action or Inaction
Whilst some will have to focus on short term goals including survival, it is now absolutely essential that clients consider their tax position in light of the expected tax rises, or at least understand the consequences of inaction.
Taking action now is essential as any rises may well represent the biggest changes in tax legislation in our lifetime. Waiting until the tax rises are announced is most likely to be too late.
If you have any queries, please feel free to reach out to your dedicated Qubic contact, or, get in touch with us via phone on 0191 232 2001, or via email at info@qubic-group.com.