A dramatic Election U turn from the Prime Minister this morning – no doubt she has been taking lessons from Mr Hammond and a few others besides!
Simon Littlejohns, Partner and Head of Tax at Birmingham accountants and business advisers Friend Partnership Limited, shares his thoughts on Prime Minster Teresa May’s announcement to call a snap election on 8 June.
Whilst the announcement does not per se have any particular or direct relevance for the tax profession given recent events, and the looming Brexit negotiations, a few thoughts spring to mind:
- Will this adversely affect any tax initiatives which are at an early stage – consultations, reviews and so forth;
- Might HMRC use the cover of the Election hullaballoo to sneak out some unwelcome measures;
- Could we have some interesting manifesto pledges which might give the incoming government a little more latitude so that Mr Hammond, if indeed he is the Chancellor after the Election, can push on without needing to worry about manifesto pledges;
- How will any pledges affect the stratification of the tax paying public between those who have and those who have not;
- Could there be some welcome ‘white rabbits’ in the manifestos – a more realistic time scale for Making Tax Digital, a lightening of the tax burden for the squeezed middle, some real incentives for business for instance; and
- Will there be a rush to execute financial transactions in the fear that certain tax rules may change. There could of course be a push to delay if tax breaks are promised.
One thing I can state for certain is that it will be some time before there is clarity and certainty with regard to the future direction of the tax code in the UK. In the absence of this I and many other tax advisers will be treading very carefully when giving forward looking tax advice to clients in the coming months.