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Tax forecast post-General Election

Tax forecast post-General Election

More fog, limited visibility, outlook uncertain…

Following the June election and the recent Queen’s Speech the outlook from a tax perspective remains very unclear. It seems that we can expect three Finance Bills within the next two years, the first of which should arrive this Summer; and with the Parliamentary recess imminent this could arrive very soon. Of the 27 bills that were included in the Queen’s Speech, 8 related to Brexit which will continue to dominate the political agenda for the foreseeable future. Two bills had a tax focus: one Brexit related which is aimed at enabling the UK to have standalone Customs, VAT and Excise regimes following exit from the EU; the other related to the abolition of Class 2 NIC and changes to the NIC treatment of termination payments.

One big question is whether we can expect all of the items that were cut from the 2017 Finance Bill to reappear in some form. These included the deemed domicile rules for Income Tax, Capital Gains Tax and Inheritance Tax; reduction of the dividend nil rate to £2,000; reform of the Substantial Shareholding Exemption; and new interest restriction and loss relief rules for companies.

We also have a new Financial Secretary to the Treasury, Mel Stride, who succeeds Jane Ellison following the loss of her seat in the recent election.

In summary, the outlook for tax remains very foggy and uncertain. Perhaps the skies will clear a little when the Summer Finance Bill arrives. We’ll issue further updates and news items as things happen….