By Cathrin Richards, partner at Azets Gloucester and Cheltenham 

As the UK approaches what is likely to be an election year, challenges loom amid ongoing economic uncertainty. The Chancellor's announcement of an early Budget on March 6 is seen as a strategic move, potentially influencing voters ahead of the election. Speculation is rife that the Government might reduce taxes, with recent measures including a 2% National Insurance cut and permanent full expensing for qualifying capital expenditure.

While there's talk of abolishing inheritance tax, the impact is limited, affecting only a small number of estates. The more ambitious goal may involve a reduction in income tax across England, Wales, and Northern Ireland, though this might not apply to Scotland due to recent tax bracket changes. Economists predict a potential £15 billion windfall from falling interest rates on Government borrowing, offering the Chancellor room to consider tax cuts.

1. Considerations for High Net Worth Individuals:

• File Tax Returns on Time: The January 31 deadline is approaching; late payments accrue interest and penalties.

• Year-End Planning: Act before April 5, 2024, considering tax-efficient investments and maximising pension contributions with advice from a specialist.

• Personal Balance Sheet Focus: Prioritise personal assets and liabilities for long-term financial success.

2. For Business Owners:

• Review Business Structure: Ensure tax-efficient income extraction, especially given recent National Insurance reductions.

• Evaluate Staff Benefits: Amid talent retention challenges, explore alternative benefits for employees.

• Optimise Business Property Ownership: Consider efficient property holding structures for potential business sales and protect against trading business uncertainties.

• Business Sale Readiness: With strong SME/entrepreneurial deal volumes, sellers should assess personal objectives and valuations, especially considering potential capital gains tax changes.

3. For Finance Directors:

• Cash Management: With a significant corporation tax rate increase, review losses and capital allowances to potentially optimise tax relief.

• Utilise Tax Reliefs: Explore Research & Development (R&D) and Patent Box relief for attractive corporate tax rates on qualifying profits from intellectual property.

• Staff Benefits for Retention: Address talent retention challenges by offering additional benefits.

We are here to help

If you have any questions in relation to your tax position, please get in touch with a member of our specialist team or your usual Azets advisor.