A Tax Raising Tory Government?
I have been in the accountancy game a while now, too many years to mention perhaps. During that time, I have seen many governments of all colours and persuasions and as a firm we have endeavoured to help our clients, both personal and commercial, navigate the peaks and troughs of taxation and legislation each introduces, refines or abolishes.
But as we await the first full budget of the ‘BoJo’ era, I find myself in an unusual situation. I believe we are about to witness a tax raising Tory government. Tory tax rises…? Yes, I know, majority governments tend to tax in the first few years and spend big in the final years of the parliament, in the vain hope we forget the former and remember the latter when stood, pen poised, at the ballot box. But historically, Tory tax rises tend to be ‘less severe’ than those of Labour or coalitions. That is until now.
Borris made some big pledges during the election and he has already signed cheques for billions-of-pounds worth of spending – recite with me “how many more nurses* are we going to deliver?” (replace as necessary – doctors, hospitals, railway lines – you name it). But he has also recruited, initially in Sajid Javid and subsequently in Rishi Sunak, chancellors that will not break the bank to finance it. Set against the backdrop of Brexit and Coronavirus and the associated slowing of the economy that many predict, the money for these ambitious plans will need to come from somewhere.
Whilst not an increase in tax, he has already committed to stop the planned annual reduction in corporation tax that was set to see us get as low as 17% in the next couple of years. And many believe there is more to come in the form of actual tax rises which could be unveiled as early as this week, when the Chancellor is due to deliver his budget.
However, with the very recent change of face at number 11, it may be the Autumn before we see the biggest changes, with three weeks seen by many as not enough time to implement changes to IHT, CGT, income tax, NI and other business tax rates.
I of course hope that I am wrong and that we see a traditional Tory approach to tax and spend in the coming months and years. But if there is one thing Borris does not seem to comply with, that is tradition…!
Tony Jadzevics – Director at Evans Weir