In the meantime, our Head of Tax, Nick Haines, plays ‘Beat the Budget’ by giving us his five tax predictions of what is likely to be in the red briefcase.
1. A rise in the Inheritance Tax threshold - The Chancellor has recently commented that his aim is to ensure inheritance tax should only be paid by the ‘rich’. What his definition of ‘rich’ is remains to be seen but this seems to be a definite hint that we could see a rise in the IHT threshold. I would expect, however, any increase to be promised for a future date i.e. post election to gain favour with the voting public.
2. A change to the Annual Investment Allowance threshold – currently set to drop from £500k to £25k at the end of year. Although the Chancellor might not go as far as maintaining the £500k allowance, I think there is a possibility he might offer more than the £25k currently planned. This will continue to encourage capital spend by businesses and again curry favour with the voting public but this is likely to depend on how far he can stretch the purse strings!
3. Small giveaways for savers? Following the stamp duty land tax reform in the Autumn Statement, and with the focus on reducing the Budget deficit, it is unlikely there are going to be any big tax giveaways this Budget. If any cuts are to be had, however, I would predict they will be aimed at savers as they continue to lose out with record low interest rates.
4. More anti-tax avoidance measures – a common theme for Budgets these days and I would anticipate some follow up on the Diverted Profits Tax announced in the 2014 Autumn Statement.
5. Further increases in the personal allowance – again a common theme for the coalition governments time in power and I would not be surprised to see promises of further increases up to £12,500 for future tax years.