This is especially true if the government in power loses the election and the chancellor with the red lunchbox has to give it back. It’s much like the promises made on an employment CV, you can only fulfil them if you get the job!
Will areas of the coalition government’s budget prove a fruitless exercise if there is a change of government? What does history say? Remember Alistair Darling’s March 2010 Budget? Despite speculation in advance, Labour’s Budget did not include an increase in VAT that had been considered.
Cue the Tory Coalition government election win with a new (and current) Chancellor Mr George Osborne. He announced an emergency Autumn Budget the same year and raised the VAT rate from 17.5% to 20%.
So what can we expect from tomorrow’s anticipated budget?
IHT changes
The Guardian has published a potential pre-election leak that appears to show that George Osborne is preparing an IHT change. The change would see parents able to pass a main property worth up to £1m to their children, tax-free, while properties worth up to £2m would have their IHT bill reduced by £140,000. An election winning change, we shall wait and see?
Pension
According to the BBC Chancellor George Osborne is “set to allow up to five million existing pensioners to swap their fixed annual payments for cash”.
The Chancellor is also expected to extend pension changes from April 2016, to allow existing pensioners to swap their annuity for a fixed lump sum.
Is this just an incentive for older voters? Some say it is certainly an incentive to spend their annuity on that classic sports car they’ve always wanted. The Chancellor has dismissed this view as “patronising”.
Tax Free Income Allowance
One of the expected measures to be revealed at the Budget is a further rise in the personal allowance threshold to £11,000. This increase would provide a £200 tax cut to around 27 million Britons. Appealing to the masses? With an election on the way and a proposed cut to beer duty, it’s a resounding yes.
Tax avoidance
Never has a company had a tax named after them, but multinational giant Google have coined a new phrase ‘Google Tax’. Therefore we are expecting a Government crackdown on multinational companies avoiding paying tax in Britain. We also expect Mr Osborne to give more powers to HMRC to combat tax avoidance schemes.
Of course this information is provided on what some expect may be announced tomorrow. To find out the actual changes we will have to wait and see until Mr Osborne opens his red box and his mouth tomorrow. With a forthcoming election, you can be certain is that any changes will be discussed and dissected over and over.
For the latest news and for details of the changes as they happen please follow our twitter feed
Also, we will be releasing our budget summary on our blog which highlights all of the changes in detail. For further information visit our blog on
www.whitehartassociates.com/blog
Please note: The information presented in this pre-election blog is based on opinion only, no financial decisions should be based on the information provided.
