Taxing Times

There is little to get festively jolly about at the moment as the Government continue to review tax reliefs. Today the Office of Tax Simplification (which certainly does sound rather good!) and formed in July, published its interim report. The 109 page document is published for "public scrutiny and comment, the methodology we have used. We would particularly welcome your assessment as to whether you think this approach would be effective if applied to the full list of reliefs and allowances." (Rt Hon Michael Jack).

The main allowances being considered within this document are

Reliefs under review:

Potentially retain
Capital gains tax relief on disposal of private residence
Income tax relief for players in the UEFA Champions League Final 2011
Income tax relief for repair and maintenance of work equipment

Potentially simplify
VAT: supplies to charities/ sales by charities
Gift aid
Lease premium relief
Capital allowances – enhanced capital allowances for energy and water efficient
technologies
Research and development tax relief

Potentially abolish
Exemption from benefit charge for late night taxis
Vaccine research relief
Millennium gift aid
Income tax exemption for National Savings Bank Ordinary Account interest
Luncheon vouchers – daily income tax relief for first 15p

However the list keeps growing and there is a pledge to review lots of other allowances and deferrals such as:

Enterprise Investment Schemes

Entrepreneurs Relief

Venture Capital Trusts

Film Tax Relief

Life Assurance Premium Relief

Life Assurance Bonds - 5% rule

Life Assurance Bonds - top slicing rule

Literary & creative artists relief

and many others - all making it considerably harder for me and every other IFA and a few Accountants to do some proper tax planning. We will obviously have to wait and see the next report, but in short- this may well pose a threat to many "normal" tax allowances.