Weybridge-based TWP Accounting LLP is warning of potential tax hikes in next month’s pre-budget report, as the Government seeks to plug a gap in their spending plans.
TWP say Capital Gains Tax (CGT) could be increased to 30% from its current 18% as the Chancellor, Alistair Darling, tries to boost Treasury funds.
Mr Darling could also raise the top rate of Stamp Duty (on properties worth more than £500,000) from 4% to 5% and may even consider raising VAT to 19%. The discounted rate of 15% is due to end in January.
The news comes after the Association of Chartered Accountants (ACCA) warned that the Government needed to take ‘drastic action to fill a large black hole in its spending plans’.
“It’s clear the Government must do something to balance their books,” said TWP’s Tax Partner, Mike Dawes.
“While measures such as these are likely to be unpopular with the public, the Chancellor will be looking for new ways to increase the amount of money in the pot.
“CGT has been at a relatively low level for some time, so seems an obvious choice for a rise, while Stamp Duty and VAT may be increased to bring us into line with other European countries. For instance, the top rate on Stamp Duty in Ireland is 9% and the top VAT rate in Germany is 19%.
“It is important that anyone who thinks they could be affected by these potential changes seeks guidance from a financial advisor to make the most of current tax advantages.”
For more information please contact 01932 704 700.