Pre-Budget Report 2009 - Problems for ‘tax cheats’ in the pre-Budget report?
HMRC has said it will look to crack down on people who seek to avoid the new 50% rate of income tax which comes into effect next year by the use of tax planning schemes that purport to convert income into capital. The problem that HMRC has is that the 32% anticipated disparity in rates (income tax at 50% and capital gains tax at 18%) is very appealing.
One real problem that I can foresee is that too much hype on planning at this stage could just lead to an increase in the capital gains tax rate to avoid the problem. If this were to be announced in the pre-Budget report it would certainly stop a lot of the current speculation.
We will be blogging on SME Plus Blog and Tax Plus Blog on Pre-Budget Report day. If you do not already subscribe to our blogs click here for SME Plus Blog or here for Tax Plus Blog to ensure you get our comment and analysis as and when it happens.
Cathy Corns is a tax adviser and a partner at Mercer & Hole. The views given in this blog are personal to the author, if you would like to discuss the contents of this post with Cathy you can call her on 01908 605552.
Date: 11th November, 2009
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