All set for emergency Budget

Robinson Reed Layton tax partner James Bailey

A leading local firm of chartered accountants and chartered tax advisers is predicting the most radical shake-up the tax system has seen in years.

Ahead of the emergency Budget on June 22, James Bailey, tax partner at Truro-based Robinson Reed Layton, said: “Given the current economic problems, the contents of the Coalition Agreement published in May, and various speeches by the Chancellor and the Prime Minister, we can be certain of several changes to the tax system.

“Capital Gains Tax (CGT), VAT, Income Tax, Corporation Tax, Inheritance Tax will all be affected, but what will remain a mystery until teatime on June 22 is from when the changes will take effect.”

One of the predictions is that the rate of CGT will increase – at least for assets not used by businesses for their trade. Robinson Reed Layton has already reported cases of panic selling, by those keen to make certain their capital gains will be taxed at the current rate of 18% rather than the predicted future one of 40% or even 50%.

There have been rumours that the increase may apply to disposals of assets since April 5, 2010 – the start of the current tax year. But Robinson Reed Layton expects the increase to apply to disposals in the next tax year, believing that this is the logical date for any such changes.

The firm will hold a Budget Briefing the day after the Budget is announced, at 7.30 am in Truro, followed by 12.30 pm in St Austell.