This Government is the biggest tax-raising parliament since records began

The Institute for Fiscal Studies (IFS) has stated that this has been the biggest tax-raising parliament since records began, pushing UK tax revenues to historically high levels. 

The increase in tax revenues over the course of this parliament will see the Government raising around £100million more in tax revenues next year, as compared to tax revenues as a percentage of national income. This percentage has increased from 33% to 37%, a higher figure than at any time since the 1940s. 

This increase is equivalent to around £3,500 per household if spread equally.

The government may announce tax cuts in the run-up to the next election, which will become clear after the Autumn Statement in November. 

Tax Planning Opportunities before 6th April 2024

Once we pass the end of the tax year the majority of the tax planning options for Income Tax and Capital Gains Tax purposes will expire, so it’s important to consider them in plenty of time. 

If you fall into any of the following categories, NOW is the time to think about tax planning opportunities, so that you can react swiftly if there are any relevant announcements in the Autumn Statement:

• You have or are thinking about a change in your personal status (single, married, separating, joining or dissolving a civil partnership).
• You are thinking about selling a capital asset, such as shares or a property. 
• You or your child’s other parent claims Child Benefit and the income of either parent is likely to exceed £50,000 for the first time during tax year 2023-24.
• Your annual income is approaching or above £100,000.
• You have not yet topped up your pension contributions for tax year 2023-24.
• You are self-employed with a 31^st March 2024 year-end.
• You are thinking about the purchase of equipment or vehicles.
• You are the director and/or shareholder of a limited company and have not yet considered voting dividends or bonuses for 2023-24. 

If any of the above apply to you, we would advise you to consider your options in good time. There may well be other opportunities too, depending on the content of the Chancellor’s speech on the 22^nd November. 

We will, as always, be in touch with all clients once we’ve heard the speech and had a chance to look at its small print, but if the above apply to you and you’d like to chat with us, please get in touch.

For more detail on the IFS report: This will be the biggest tax-raising parliament on record | Institute for Fiscal Studies (ifs.org.uk)