But what will the election bring?
Patricia Mock, a director in the private clients practice at
Deloitte, comments:
"As far as personal taxes are concerned, the Budget was
notable by what it did not contain, rather than what it did. There
were no changes to the proposed 50% tax rate, which will apply to
incomes over £150,000 from 6 April 2010, nor to the NIC
increases which will apply from 6 April 2011. The withdrawal of
personal allowances for income over £100,000 also remains,
although this can be alleviated by pension contributions or gift
aid contributions.
"Capital gains tax (CGT) also remained at 18%, although there
was a welcome extension to entrepreneurs' relief to a lifetime
limit of £2,000,000 gains from the previous £1,000,000.
This can give an overall CGT saving to entrepreneurs of
£160,000 and will be very welcome to those who are seeing
value return to their owner managed businesses as the recession
passes."
HMRC powers
Mock says: "HMRC powers are also dealt with, in particular
introducing an enhanced penalty regime for those who evade tax
relating to offshore matters. This follows HMRC's recent
offshore disclosure facilities, particularly the recent facility
for Liechtenstein. The penalty rate will be a multiple of the rate
that would apply to UK evasion, and the multiple will depend on the
exchange of information requirements that the UK has with the
overseas country concerned. If there are automatic exchange
arrangements then the penalty will be the same as for non
compliance in the UK, but if there are no exchange requirements the
penalty will be twice the equivalent UK rate. This could lead to
penalties of up to 200%.
"HMRC powers in this area were the subject of a recent
consultation, in which a requirement for all UK taxpayers opening
an offshore account to notify HMRC was proposed. This requirement
has not been proceeded with at the current time and it is welcome
that HMRC powers are being focussed more closely on actual evasion,
rather than imposing notification requirements on all
taxpayers."
Charities
Mock says: "Those making donations to charity will welcome
the extension of UK tax reliefs to certain organisations equivalent
to UK charities in the EU, Norway and Iceland. This follows a
European Court of Justice decision last year. It may be possible to
apply for tax relief in respect of donations made to qualifying EU,
Norwegian and Icelandic charities between 27 January 2009 and 1
April 2010; HMRC have indicated that such claims will be considered
on a case by case basis.
"Non-UK residents who have UK source income will now be able
to obtain tax relief on gift aid donations. It also seems that 50%
taxpayers will be able to get 50% relief on their gift aid
payments, which has been the subject of some debate over recent
months.
"Although there are a number of inconsistencies which are
being corrected, these improvements will be generally
welcomed."
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