There is a furore about the information reported about tax changes and the Autumn Statement.
As a resident of this country you are likely to feel that the press are experts on what they present in articles to you. This is not always the case, and generally not where tax is concerned. Read the articles by all means, but take advice from a qualified accountant, tax adviser or financial adviser. There is a reason we train for years and have to complete rigorous exams and annual professional development.
The hype got me thinking back to my days (late nights!) of study. How do the Government make changes to legislation?
The Autumn Statement provides an opportunity for the Government to provide an update on its financial plans, economic forecasts and policy priorities. From a taxation perspective it allows the Chancellor through the "Provisional Collection of Taxes Act 1968" to enable immediate implementation of tax changes to adjust in times of economic requirements.
Historically, the changes that are made through this Act are largely in regard to indirect taxes such as fuel duty and alcohol duty. Direct taxes (income tax, capital gains tax, corporation tax etc..) usually have a delayed implementation until the next financial year to allow individuals and businesses time to adjust.
The other area that needs to adjust is software. Direct taxes are calculated using a vast array of software options and the changing of taxation takes time and testing to implement.
So whilst we might see our wine, beer and fuel increase at midnight on the 30th October this year, we are unlikely to see any immediate changes to direct taxes overnight or indeed before the next tax year. (Caveat that I do think they may raise Capital Gains Tax back to 28% as the higher rate, currently 24%).
For the larger areas of tax changes the Government requires a Finance Act, these are generally announced at the Spring Budget and implemented in the tax year following the one that is about to start. In recent times this has included the tax changes to furnished holiday lets and changes to non domiciled individual taxation. In the future, this may include changes to inheritance tax and rebasing or reliefs.
A Finance Act has to go through a formal process in both the House of Commons and House of Lords. Although the House of Lords cannot make any changes and will only agree the act, there is a process and it will be followed.
What I am hoping you read into this is that BIG tax changes don't happen overnight and there will be time for planning post the Autumn Statement.
Still worried - book a meeting with me to discuss your concerns. Want to be the first to get tax advice post the Autumn Statement - then call me to get a meeting booked in.
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