Date Published: 03/09/2020 15:49
Financial planning is important in normal times, but with major changes to taxes expected to pay for the effects of Covid-19 it is absolutely vital, says Jillian Thomas.
Rishi Sunak says there won’t be a ‘horror show’ of tax rises, but the bill for dealing with the medical emergency of Covid is growing day by day.
The Job Retention Scheme has cost £35bn so far; the newly announced KickStart Job Scheme has a £2bn price tag attached, and even those nice cheap meals in August added up to a restaurant bill of £400m.
All that money has to come from somewhere. So, what will be in that red briefcase when the autumn Budget happens?
Firstly, we don’t actually know when the Budget will be. It may happen in November, with a mini statement in February after the effects of Brexit become clearer. Or some commentators are saying it could be more of a mini statement this year, with a full blown Budget in the New Year.
Whenever it comes, one thing is clear: there will have to be some changes to taxes. It could be increases in Corporation Tax (with rumours of an increase from 19 per cent to 24 per cent), in tax paid on dividends, on Capital Gains Tax, or changes to pension allowances. Or who knows what else?
And when it happens there won’t be much time to act. With many year-ends in sight at December 31 or the end of the financial year looming on March 31, we need to act fast.
Which is why we are urging everyone, whether you are a business owner, employee or retired; whether you are planning around pensions or inheritance or investments, whatever your financial plans, to get your heads out of the proverbial sand. We need to plan and we need to do that sooner rather than later.
This is not about the details. This is about the planning. This is about scoping out what you need and want. Discussions about investments come right at the end. Details like ‘is this the best ISA’ or what wrapper we use are the last things we need to consider.
Right now, we need to wake up, realise - as Boris Johnson said - that there are choppy waters ahead, and make sure our boat is watertight.
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