UK and International Tax news
New UK Tax Measures And The Next Budget
Monday 17th May 2010
The new Conservative Liberal Democrat coalition Government has recently issued a summary document setting out agreements reached on a number of major issues including tax measures and these include the following proposals.
An announcement is to be made in their first Budget for a substantial increase in the personal allowance, with effect from April 2011, with the benefits focused on those with lower and middle incomes. This is to be funded with the money that would have been used to pay for the increase in employee national insurance (NIC) thresholds proposed by the Conservatives, as well as revenues from increases in capital gains tax rates for non-business assets as described below. The increase in employer NIC thresholds proposed by the Conservatives will go ahead in order to stop Labour’s jobs tax. The new government also agrees to a longer term policy objective of further increasing the personal allowance to £10,000, making further real terms steps each year towards this objective, and this is to take priority over other tax cuts, including cuts to Inheritance Tax.
There will be a provision for Liberal Democrat MPs to abstain on budget resolutions to
introduce transferable tax allowances for married couples without prejudice to the coalition
agreement.
The parties agree that a switch should be made to a per-plane, rather than per-passenger duty, with a proportion of any increased revenues over time to be used to help fund increases in the personal allowance.
The Government is also to seek a detailed agreement on taxing non-business capital gains at rates similar or close to those applied to income, with generous exemptions for entrepreneurial business activities.
The coalition agrees, in addition, that tackling tax avoidance is essential for the new government, and that all efforts will be made to do so, including detailed development of Liberal Democrat proposals.
The first Budget of the new Government has just been set for 22 June 2010 and Robinson Rushen will be issuing a summary of the main tax proposals announced, but in the meantime, if you would like to discuss the above in more detail, please contact Keith Rushen on +44 (0)20 7486 2378.
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