News | November 5, 2021

Legal experts comment on today’s Budget: Chancellor proposes to increase overall tax take by stealth

Partners Jenny Cutts and Oliver Embley have been quoted in IFA Magazine, commenting on the Chancellor’s Autumn Budget announcements.

Jenny Cutts, comments:
“The much-predicated tax hikes did not arrive in the Autumn Budget. However, with the freeze on tax allowances in the March Budget Speech and the introduction of the “NHS” tax by increasing National Insurance announced by the Prime minister earlier this year, the Chancellor is relying heavily on fiscal drag to fill up the Treasury coffers.

As the costs of living rise and wage inflation increases more people will fall into the tax net and taxpayers will therefore, pay more tax as they move into the higher rate tax brackets. This is a less provocative way of increasing the tax take compared to raising the tax rates. Some will question whether it brings those who can least afford it into the tax net, and it remains to be seen whether this Chancellor will introduce more radical tax reforms and rates to balance the books later in his tenure.”

Oliver Embley, comments:
”The Budget was fairly quiet for private individuals, and it was a relief to many that the anticipated rise to Capital Gains Tax (”CGT”’) did not go ahead. We welcome the approach taken by the Chancellor as a higher rate of CGT would disincentivise taxpayers from making taxable disposals and could ultimately result in less tax being raised.

There was some further positive news for individuals who own second homes, buy-to-lets, or holiday homes buried in the detail of the Budget. For those who sell or gift residential property from 27 October 2021, they now have 60 days (rather than 30 days) from the date of completion to report any gains to HM Revenue and Customs and pay any CGT owed.

This is a common sense approach and it allows individuals time to obtain accurate valuations and calculate their CGT liability without the worry of a penalty.”

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