Chancellor Sajid Javid last night announced that this year's Budget, postponed ahead of the December election, will be held on 11 March.
While much of the focus has been on the tearing up of Treasury rules and measures to try and 'level up' the rest of the country, there are a number of tax changes in the works that will be - or could be - unveiled.
Paul Falvey, tax partner at accountancy firm BDO, writes for This is Money on five tax changes you should keep an eye for on Budget day.
What tax changes could Sajid Javid have in his red box on 11 March?
The Government plans to introduce new legislation from April 2020 to help tackle the perceived abuse of tax and national insurance contributions relating to off-payroll labour in the private sector.
The change will affect medium and large private sector businesses that engage workers operating through an intermediary and extends the rules that are in place for the public sector since April 2017.
As a consequence, if you are a contractor, you need to establish whether you are likely to be considered inside or outside of IR35 from April.
If you have listed yourself as 'outside' until now and the conditions suggest you will be adjudged 'inside' moving forward, you should prepare yourself - under the new rules your income will be the same as if you are in a full time job paid via PAYE.
In practice this means that if you do nothing you are likely to take home less pay.Property
The government plans to implement significant changes to Capital Gains Tax, specifically regarding lettings relief and Principal Private Residence. From 6 April, lettings relief will be reformed so that it only applies where an owner is in shared occupation with their tenant.
There is a trap if you buy a new home before you sell your current one because PPR relief will be reduced from 18 months to 9 months.
This will mean that individuals set on moving will need to stay in their home until it is sold or ensure that a sale of their old property takes place within nine months of them moving out to avoid a potential CGT charge.
So, if you are looking to sell a property you should look at these proposed changes without delay in order to avoid a potentially hefty and unexpected tax bill.
Paul Falvey, tax partner at BDO
In July 2019, the Office of Tax Simplification published its second report on proposed changes to the system, which covered the main complexities and technical issues that arise from the way the tax works.
There were a number of significant changes suggested, which revolved around a common perception that the IHT rules are outdated, complex, and seen by many as ripe for reform.
There has been talk of ‘simplifying’ the system in order to raise more money for social care priorities, an example of which could be reforming Business Property Relief. BPR is a valuable relief that can give 100% IHT relief for trading assets.
Subject to a number of other conditions, BPR is available for shares in companies that are ‘mainly’ trading.
The OTS report proposed that the definition of ‘trading company’ be amended to bring it into line with the test for Entrepreneurs’ Relief, i.e. the company must be considered to not have ‘substantial non-trading activities’.
Generally, this will mean that the company’s trading activities must constitute at least 80% of its whole activities. Individuals holding shares in businesses which are structured as companies should review their future eligibility to this