Budget 2016: What it really means for you?
15 March 2016
This Budget is an opportunity for the Chancellor to try and lay the groundwork for the uncertain times ahead. Both the domestic and international backdrop cannot be ignored. Whilst this is an opportunity for the Chancellor to enact major reforms and address some of the long trailed issues, it is questionable whether he will feel now is the right time.
The Chancellor has a fine line to tread in trying to continue to attract investment by keeping Britain competitive and open for business whilst sticking to his commitments on managing the deficit and delivering on tackling avoidance.
After much recent speculation, the Treasury has made it clear that “now isn’t the right time” for sweeping changes to pensions tax relief. However, that doesn’t mean to say that there won’t be changes to pensions, and whilst many will see this as a potential opportunity missed it may yet provide fertile ground for changes with real impact on those looking to save for the future. Given the status of the economic forecasts, the Chancellor will be looking to raise revenue so expect noise also around salary sacrifice arrangements, which enable employees to choose between cash and benefits (including pensions), annual leave, childcare and other benefits – these could be targeted as a revenue raiser.
The Chancellor has some work to do to bridge the gap between the current housing position and his pledge to deliver 275,000 additional affordable homes by 2020. Will he take this opportunity to create real impact in the housing market by taking decisive action to support home owners and future buyers? Could this be one of the surprises for Wednesday?
An area where the Chancellor wants to make his mark is in looking at how the tax rules apply to large businesses. Here we will likely see final proposals imposing obligations on large companies to publish their tax strategy in a drive to improve tax transparency. The Chancellor will need to ensure that resources at HMRC are deployed to meet the increasing demands on them to enforce these and other measures aimed at business.
For the first time in half a decade we will get a ‘road map’ of the Government’s tax policy aims in a bid to provide some much needed certainty for the direction of travel for the way businesses will be taxed going forward– we will also hear what changes are in store for business and their tax deductions on interest payments – where a scaling back of the current rules is on the cards.
So plenty to look out for. To make sure you stay up-to-date on what comes out of the announcement and what you need to be thinking about next follow our commentary or speak to myself or your usual PwC advisor.
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