Steve ‘Mystic’ Maggs, tax partner at Robinson Reed Layton, an independent firm of chartered accountants and chartered tax advisers, has revealed his top five predictions for the Spring Budget, which is to be delivered next week.
The upcoming Spring Budget on Wednesday (March 8) will be the first of two Budgets this year, following the Chancellor’s announcement in the Autumn Statement that the Budget will be moving to the autumn.
‘Mystic’ Maggs’ top five predictions for the Spring Budget are:
- An increase in the Annual Investment Allowance (AIA)
With the Government wishing to encourage investment by UK business, an increase in the AIA would be widely welcomed.
- A reduction in National Insurance
The Government may look to reduce the rate of the Class 1 NIC liability that an employer has to pay in an attempt to stimulate wage growth.
- A review of tax-motivated incorporations
Tax-motivated incorporations are a focus area for HMRC, so an increase in the dividend income tax rates would not be a surprise.
- Tax rises and relief restrictions
The Government may see the well-publicised NHS funding crisis as an opportune time to announce tax rises and/or relief restrictions. Don’t be surprised by an increase in the capital gains tax rates, along with changes to reduce the tax benefits of incorporation.
- Making Tax Digital
The Spring Budget would be the ideal time for the Chancellor to address some of the concerns surrounding the Making Tax Digital proposals. Mandatory digital reporting is being introduced in just over a year for the first businesses, so it is time for some definitive answers on the topic.
Explaining his predictions, Maggs said: “With inflation on the rise, the pound continuing to perform weakly on currency markets and the triggering of Article 50 imminent, I’m expecting only tweaks and adjustments to the current tax system, with the focus on business growth and the deficit.
“I was disappointed by Mr Hammond’s failure to make his mark as Chancellor with the Autumn Statement in November, and with a second Budget to take place in the in the autumn this year, I suspect that the Spring Budget will be somewhat of a “wait and see” announcement once again.”
To see if Maggs’ predictions come to fruition, keep an eye on the Robinson Reed Layton Twitter account on Wednesday, March 8, with further analysis being featured on Steve Maggs Tax Blog in the days following the Spring Budget.
