BR Blog: Budget Predictions - Nimesh Shah
Blick Rothenberg partner Nimesh Shah shares his thoughts on what the Chancellor might, should and should not do at the upcoming Budget.
What the Chancellor might do:
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- Introduce an additional rate of NIC for people earning over £150,000 – this would be aligned with the highest rate of income tax.
- Align NIC for employees and the self-employed to remove the tax distinction between the two.
- Cap the maximum amount an individual can hold in an ISA tax free.
- Restrict main residence relief for properties where the capital gain is more than £250,000 (for example).
What the Chancellor should do:
- Increase the basic rate tax band. There are more people who are higher rate taxpayers, but this isn’t because wages are higher but because the basic rate tax band has been reduced since 2010/11 when it was £37,400.
- Reinstate the personal allowance for everyone.
- Abolish the marriage allowance.
- Abolish the High Income Child Benefit Charge and alter the tax credits system accordingly.
- Abolish the savings allowance – it is complicated and will not provide much benefit to those it is intended to support as interest rates continue to be low.
- Put a greater emphasis on tax simplification – this should not be through the OTS but the onus and power should be placed on HMRC and the Treasury.
- Harmonise income tax and NIC (effectively abolishing NIC).
What the Chancellor should not do:
- Introduce any new changes. There are a number of open consultations (non-domicile, company distributions, private equity) and these need to carefully thought through and some re-considered completely.
- Introduce the additional 3% SDLT for second properties and consider generating revenue through increasing SDLT on commercial properties (which remain at 4%).