How Bare is the Government Cupboard?

Posted on: 19.05.2010    12:26:34

Whether you think it was a sick joke, or a welcome display of honesty, the note left by Liam Byrne to David Laws did follow a kind of precedent.

His note read ” Dear Chief Secretary, I’m afraid there is no money. Good luck ” .

A previous Labour Chancellor leaving office passed the keys over to his Conservative successor with the immortal words, ” over to you old cock, sorry to leave things in such a mess “

We will have an emergency budget on June 22 in which the new Chancellor will announce a range of new tax changes.

These will help those on low incomes but we can expect middle and higher earners to be hit.

Top of the agenda is likely to be a hike in VAT to 20 % to bring it into line with our partners in Europe.

There will also be big changes to Capital Gains tax designed to hit those with second homes and large share portfolios.

My sources tell me, however, that we can expect generous relief’s for genuine business assets.

I expect this to go well beyond the current Entrepreneur Relief, perhaps bringing back the old taper relief definition of business assets.

There is a tussle going on between the two parts of the coalition as to whether the CGT annual exemption should be reduced.

It is possible that these CGT changes could take place from Budget day, but April 6 next year is more likely.

Brace yourself and hang on to your wallet as the Coalition lets loose in trying to reduce the UK debt burden. It is going to be painful.

 

Author: Chris Slay

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