With the Labour government’s Autumn Budget on the horizon, several tax changes are expected that could impact individuals and businesses alike. Here’s what you need to know and how to prepare.
1. Income Tax Hikes for High Earners
Labour plans to increase tax rates for higher income brackets and reduce personal allowances for top earners.
Prepare: Consider salary sacrifice schemes or pension contributions to reduce taxable income. Explore tax-efficient investments for additional relief.
2. Capital Gains Tax AlignmentExpect CGT rates to align with income tax, meaning higher taxes on gains from property and shares.
Prepare: If selling assets, do so before the changes. Use exemptions and consider tax-efficient structures like ISAs or trusts.
3. Corporation Tax Increases
Labour is likely to raise corporation tax, particularly for large, profitable businesses.
Prepare: Review tax strategies and take advantage of any available reliefs. SMEs should check for incentives to soften the impact.
4. Wealth Tax Introduction
A wealth tax on high-net-worth individuals is possible, targeting property and financial assets.
Prepare: Assess your asset portfolio, consider trusts, and consult a wealth manager for tax-efficient options.
5. Inheritance Tax Changes
Labour may lower thresholds or raise rates on inheritance tax, increasing the burden on estates.
Prepare: Consider lifetime gifts, trusts, or investments that qualify for IHT relief.
6. Green Taxes and VAT Adjustments
Increases in green taxes and potential VAT changes on luxury goods are expected.
Prepare: Businesses should invest in green initiatives and evaluate pricing strategies to adapt to VAT hikes.
Conclusion:
The Autumn Budget will likely bring substantial tax changes. Early planning and strategic advice can help you navigate these adjustments effectively.