Tax specialists open doors to live budget event

Crowe’s tax specialists who will be hosting a live Budget event at the firm’s Black Country House offices on Wednesday, 30 October are predicting a roller coaster ride as new Chancellor Rachel Reeves unveils her first fiscal statement.

Ross Prince, managing partner of Crowe in the Midlands and South West, said: “There is little doubt that the budget on 30 October will be compelling viewing for SME owners, people with savings or those with so-called ‘unearned income’.

“Chanceller Reeves and Prime Minister Starmer have said that they won’t raise taxes for ‘working people’ but that they will have to raise some taxes to plug a £22 billion black hole. But what does this really mean?”

Tax partner Rob Gunn (pictured) said: “Much has been written about punitive changes to reliefs and rates for Inheritance Tax (IHT) and Capital Gains Tax (CGT), and also pension tax relief too, but will all of this be enough, in the short term at least, to generate the income that the country’s coffers need while keeping borrowing in check?

“What else can the Chancellor do? Maybe a look back into history could provide the answer.

“Could we possibly see the return of the Investment Income Surcharge which was last seen in the 1970s?

“And, alongside that, the re-introduction of the Close Company distribution provisions, which imposed a levy on owner-managed businesses that retained profits in their businesses, rather than distributed them to their owners – who would otherwise have had to pay a much higher rate of tax.”

The Investment Income Surcharge was introduced by the Chancellor Anthony Barber in 1973 and was applied to unearned income at a rate of 15 per cent until 1984.

Rob Gunn said: “Some of the areas business owners may wish to look at include, using hold over relief while they still can to pass down at least some family shareholdings, and using IHT nil rate bands where concerns exist regarding asset protection to create discretionary trusts.”

Ross Prince added: “As well as company owners, those likely to be targeted include pensioners and private individuals with significant savings who may not be classified as ‘working people’ and can therefore be expected to contribute more.

“This could have serious implications for succession plans and the retirement plans of millions.

“Those considering helping to fund their children and grandchildren’s education must surely be having second thoughts, and this opens up implications for the state education system and pressure on places.

“There is much to discuss before the event, and we suspect there will be even more to analyse after the event. We hope to see as many clients, colleagues and contacts at our live event as we can accommodate and I would urge people to apply for an invitation now.”

Crowe has issued an open invitation to business owners and private individuals to join specialist partners who will provide live analysis on announcements as they are made.

Those wishing to attend should email [email protected] or call 0121 543 1900.