Prepare for a greater tax burden

It is inevitable that individuals and businesses around the world will be subject to more tax to cover the cost of the Covid-19 pandemic. The UK is no exception.

The Autumn budget did not contain big tax changes but the freeze on various allowances and tax bands until 2026, during a period of increasing inflation, will mean a tax rise for many, even if the tax rate may not have changed.

Like most recent Chancellors, Rishi has gone for the easy pickings. The 1.25% NI rate rise is more accurately expressed as an increase of 1.25 percentage points. This actually equates to a more than 10% increase. Inflationary growth in incomes and asset values over the next five years will also result in additional tax being paid, due to many allowances and thresholds being frozen.

Tax planning can be an emotive subject, but it makes sense to pay attention to one's tax affairs to avoid the blind spots and tax-traps that can trip us up if we are not careful. It can be a tricky area with lots of niche rules and frequent changes, so always best to seek out expert advice that's tailored to your individual situation - no two people have exactly the same income, savings, assets and family set-up, so tax planning is a very personal thing.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief is dependent on individual circumstances.

For a complimentary guide on wealth management, retirement planning or Inheritance Tax planning, get in touch.