National Insurance – at the moment National Insurance contributions for the self-employed can be around 3% lower than for employees, so it seems extremely likely that there will be increases for NI contributions for the self-employed, to at least in line with employee rates.
Capital Gains Tax – the Office of Tax Simplification has already called for the simplification of Capital Gains Tax (CGT). CGT is a complex tax, and there are a number of allowances, some of which are difficult to understand. As things stand there are four different rates of CGT so it might be that the lower rates would be removed and some reliefs simply abolished. Some commentators have also suggested doing away with the annual exemption (currently £12,300) and a possible cap being introduced on main residence relief (which applies if you make a gain when selling your main home).
Inheritance Tax – at the beginning of this year a cross-party committee recommended a reform of Inheritance Tax (IHT). It’s no surprise that IHT has been under scrutiny for some time, and one of the areas which might be targeted is the exemption for lifetime gifts. As things stand there are no limits in place for lifetime gifts, provided relevant conditions are met. Limits could be introduced, along with the removal or change to other allowances including exemptions for agricultural and business property.
Other target areas – it’s been some time since there has been a rise in fuel duty. Corporation tax is also at a historically low rate. It would be no surprise to see increases to both in a future Budget statement. The Government may also consider more interesting and creative tax reliefs in the future such as the Green Homes Grant scheme and the Eat Out to Help Out scheme which we have recently seen.
There are no certainties when it comes to predicting what might happen to UK taxes in the future. Yet what is clear is that the next Budget statement (whenever that happens) will be delivered against a backdrop of a spiralling budget deficit that is very likely to be addressed by the Government increasing taxes.