No budget this year, what tax planning can I take advantage of?
Financial management and tax planning can offer you significant savings if executed properly. Many of us were waiting for the Chancellor’s Autumn Budget to be released before we started planning, but now that the Budget has been cancelled, what tax planning should you be taking advantage of?
What is the 2020 Winter Economy Plan?
On September 24th 2020, Chancellor Rishi Sunak unveiled his Winter Economy Plan. His plan included a large amount of support for businesses across the UK in anticipation of a second wave of Coronavirus.
The cancellation of the Autumn budget came as a surprise to many, but rightly so, the Chancellor wants to focus on “the here and now”, stating that “now is not the time to outline long-term plans”.
What announcements in the Winter Economy Plan should I be aware of?
- From November 1st 2020, the new Job Support Scheme has been implemented. The scheme will be running for six months and has been created for businesses who are under threat during the winter months. The government are contributing up to ⅔ worth of wages for employees, but only once they hit a certain threshold of hours.
- A cut VAT rate of 15% for hospitality and tourism has been extended to March next year, in order to try and boost these sectors for longer. These reductions will help companies cut prices which should encourage an increase in consumers. This could potentially save thousands of businesses.
- Finally, the implementation of the New Payment Scheme and “Time to Pay” will allow payment deferrals, this is a good opportunity for tax planning.
Are there any current income tax reliefs?
Currently, there are no specific income tax reliefs for those impacted by COVID-19. The majority of income support has gone directly to businesses with employee and consumer support coming from the national furlough scheme and Job Support Scheme. Income from both schemes is taxed at the same rate as usual income tax, with no tax relief.
What is the current capital gains tax position?
Although capital gains tax has not been adjusted recently as the government’s focus has been on stabilising the economy, there is the potential for it to change in the coming months. Prior to the Autumn Budget being delayed, there were rumours that the Chancellor, Rishi Sunak, planned to increase capital gains tax in order to try and minimise the UK’s staggering budget deficit.
It is always beneficial to take advantage of tax planning as the reward of structuring your finances in a tax-efficient way ensures you will never pay more than you have to. Staying up to date with government changes to capital gains tax, property tax and income tax will help you save money and make your finances much more predictable over the long term.
Take advantage of one of our free tax consultations by contacting one of our consultants here