After the conservative's won an outright majority in the recent UK elections. UK businesses heaved a sigh of relief from the usual months of economic uncertainty following an election particularly a coalition government. So much so that the FTSE 100 gained more than 1.6% the next day after the election with energy companies just some of the companies who saw their share prices rise due to the lack of the Liberal Democrats or Labour Party to curb gas and energy prices to consumers.
While big businesses will look forward to a lowering of headline corporation tax rates from 28% to 20%. Self employed and employed people enjoy little comfort in the knowledge that HMRC changes and tax reforms will be potentially harsher without a coalition partner to rein back the Conservatives.
A decrease in personal income tax is only likely to materialise when the Tory government feels the UK economy is clearly safe from its deficit spectre and less prone to the economic problems as suffered by the economic union.
The Prime Minister David Cameron has already made pre-election promises to leave a lot of taxes alone, but if he tries to fulfil on this promise then this means he doesn't leave himself and the Chancellor much in the way of options.
Some of the pledges made by Mr Cameron were that there will be no increases in the rates of VAT, income tax or national insurance and that inheritance tax's zero rate band will increase to homes up to £1million.
So in the short to medium term this simply equals a uncertainly for personal income tax payers that he will either change his election pledges or raise tax in other areas further burdening the average tax payer.
By Anni Khan at Tax Affinity Accountants.
Tax Affinity Accountants are experts in Tax and Accountancy. Based in Kingston upon Thames they provide a bespoke service to clients right across the UK and are considered in the industry to be experts in business advice. They mentor and support members of the public to make their businesses grow and reach their full potential.
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