News Archive - May 2010
Election aftermath
12/05/2010
Firstly, I would like to say a long-awaited good riddance to Gordon Brown. Now the election result has finally been rubber-stamped, it will be interesting to see how the Conservative and Liberal Democrat economic policies will be amalgamated.
The initial rumblings are that there will be an increase to the personal income tax allowance which should benefit everybody, especially those on low incomes. This might be funded by an increase in the rate of Capital Gains Tax (CGT) which currently applies to gains made on certain investments, such as second homes and shares held outside an ISA. CGT was only revamped recently, and it is to be hoped that any changes will not penalise entrepreneurs wishing to dispose of their businesses. It might instead serve as a tax on those high earners who have restructured their income to make the most of the 18% top rate of CGT as opposed to the 50% top Income Tax rate.
It is clear that the new government has to address the budget deficit by raising money somehow - the Conservatives' planned increase to the Inheritance Tax allowance has been shelved. They have however pledged to reduce or remove the planned increase to National Insurance contributions (employer and employee) which they saw as a tax on jobs which could damage the recovery.
As soon as the new proposals are laid out in full, I will comment on any ramifications.