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The results of the Conservative leadership election came through just as we were going to press. Now that Liz Truss has been confirmed as the winner, and will have become prime minister by the time you read this, there will be huge interest in what she actually does about taxation.
Tax reform played a large part in her campaign and few major taxes escaped her attention. There are likely to be changes to income tax rates and allowances, and the planned increases in National Insurance and corporation tax are almost certain to be cancelled. We are also promised a review of IR35 and a fresh look at the implementation of the loan charge. Indeed, taking everything together there is a programme of reform here which could easily occupy a government for a full five years.
How much of this agenda can realistically be achieved in the short term? There will almost certainly be some sort of fiscal statement this month and perhaps a full Budget before Christmas – I am sure that she will want to get as much done in as short a time as possible. The worsening economic conditions will require immediate attention and there is bound to be a short honeymoon period during which she can force through change.
Whatever one’s personal views of her policies – and Taxation is staunchly agnostic on the politics of tax – we can only hope that any changes are properly thought through. Ms Truss has the advantage of being a former Treasury minister, so she does know how the Treasury machine works. As the old saying (almost) goes ‘reform tax in haste: repent at leisure’.
If you do one thing...
If you take on an existing trust as a client, be sure to read HMRC’s guidance about reporting unregistered trusts or trusts where information is missing or there are discrepancies (tinyurl.com/hmrcreptrdis).
