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Accountants Make UK Autumn Statement Predictions

by Robert Lee, Tax-News.com, London

28 November 2012


George Osborne's Autumn Statement is more likely to announce the results of a number of consultations than initiate tax policies on which the UK government could be seen to u-turn, a leading accountancy firm has predicted.

Francesca Lagerberg, Head of Tax at leading business and financial adviser Grant Thornton UK, anticipates that Osborne will seek to avoid a repeat of the March Budget's so-called "omnishambles", after which the government climbed down on a series of policies including a "pasty tax".

The government has consulted extensively on proposals for a General Anti-Abuse Rule (GAAR), and Lagerberg expects this to form the flagship measure in the Statement. Some refinements to the draft issued in the summer are likely, but Lagerberg warns that it is probably too early to see concrete measures announced, with a statement of intent more probable.

The government has also carried out a series of consultations on the creation of a statutory residence test, designed to help taxpayers determine if they are resident or not in the UK. Grant Thornton is hoping that Osborne will offer clarity on some issues highlighted during the consultation process, including the importance to be accorded to any UK accommodation. It will also be necessary that the government makes clear that its proposals to deal with properties worth over GBP2m (USD3.2m), particularly those held through offshore structures, are workable, Lagerberg said.

The coalition government is committed to raising the personal income tax allowance to GBP10,000 by April, 2015. Lagerberg sees Osborne as likely to reaffirm this target, and while the April, 2013 rise is already announced, she feels that if there is any scope to show a continuing upward path it will help provide some comfort to those on lower income levels and those who are due to lose their child benefit from January, 2013. It has also been rumoured that the government will substantially reduce the pension tax relief to the basic rate (currently 20%) rather than the taxpayer's highest rate. However, Lagerberg is hopeful that Osborne will leave the policy alone, to let changes made in 2010 "bed down."

 

TAGS: compliance | tax | economics | business | tax compliance | tax avoidance | tax incentives | fiscal policy | budget | United Kingdom | offshore | tax reform | individual income tax

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