Law firm Withers are first out of the gate with their pre-Budget predictions. Herewith the results.
Law firm Withers are first out of the gate with their pre-Budget predictions. Herewith, what Chris Groves and Sophie Dworetzsky think will be in it:
> Increases in the basic and higher rate of income tax
Comments Christopher Groves: “An increase in the top rate of income tax to 50% in the coming months is inevitable. It has already been confirmed by the Pre-Budget Report and will come into effect on 6 April 2010. The only question is how long will it last? Both Labour and Conservatives have indicated that they do not see this rise as a permanent fixture but any reduction would be most likely to happen closer to the end of the next Parliament than the beginning.
Related
“All parties remain wary of any suggestion of an increase in the headline rates of tax, but one alternative may be freezing thresholds at which tax currently applies or raise them at a lower rate than the rise in average earnings, pushing more earners into a higher tax bracket.”
> Increase in the rate of VAT
Christopher Groves says: “The two taxes that raise significant revenue for the Exchequer are income tax and VAT. Given the need to address the scale of Britain’s public debt, it is likely that VAT will be increased to 19% or even 20% after the election.”
> Increase in the rate of Capital Gains Tax
Content from our partners
Comments Christopher Groves: “This has been widely mooted and is certainly possible. Increases in the capital gains tax rate can have a negative effect on revenue as taxpayers delay making disposals, so change may be unlikely. However, the differential between the top rate of income tax and capital gains tax will be 32% after 6 April 2010 and therefore we may see a higher marginal rate of capital gains tax for top rate taxpayers to reduce the incentive to convert income into capital gains”.
> An extension to the Bank Payroll Tax
Says Christopher Groves: “The Bank Payroll Tax is due to expire on 5 April 2010. However, there have been suggestions that it will be extended through the summer to catch banks with later year-ends, who have not declared their bonuses and this is still likely.”
Withers is an international law firm dedicated to entrepreneurs, their families and their businesses. The worldwide group has 102 partners and around 700 people dedicated to corporate, finance, commercial, tax, trusts, estate planning, litigation, charities, employment, family law and other legal issues facing high net worth individuals, their families, businesses and advisers globally. Withers has worldwide offices in all the major centres including New York, New Haven & Greenwich (Connecticut), the British Virgin Islands, London, Hong Kong, Geneva and Milan.
For more, visit withersworldwide.com
