On the 20 July 2010, the Chancellor of the Exchequer announced the creation of the Office of Tax Simplification (OTS) to provide the Government with independent advice on simplifying the UK tax system and this included a review into all current tax reliefs.


In November 2010, the OTS published a list of 1,042 currently available tax reliefs. It was decided for various reasons not to look at 887 of these reliefs which left 155 still on the list.


They were then reviewed with the idea of recommending 1 of 3 options: to retain the relief in its current form, to abolish it completely or to amend it, so as to make it more simple.


On 3 March 2011 the OTS made a number of recommendations but of particular note are the recommendations for a separate review of the whole operation of IHT and of Capital Gains Tax.


These are long term projects but it may be as well to start any planning sooner rather than later to take advantage of the current reliefs that may not be available in the future.


The above are just a few suggestions that may be of interest and there may be other opportunities for your individual circumstances. Speak to your Old Mill Financial Planner if you would like more information on tax savings available.


A budget for growth?


The Chancellor has managed to project some positive headlines from his budget – focusing on all aspects of growth – a nice irony when he also announced lower projections for economic growth over the next two years – as Labour quickly pointed out.


However, this cannot take away from a number of nice headline grabbing touches of positive spin. The biggest headline has been grabbed by his help for the motorist. Apart from the almost inevitable delay in the increase in duty this amounts to a cut of 1p – a small change considering the 3p rise due to the raising of the VAT rate in January. This does not begin to answer the calls for a joined up policy to help businesses and individuals in the hard pressed South West where our fuel bills are both largely unavoidable and outstrip most of the country.


At Old Mill we have to assess how much help there is for the majority of our clients: owner managed businesses in the South West and


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personal clients, many with income from investment. Yes, there are some good bits on simplifying taxes for employers and reducing the burden of regulations. Apparently 43 minor tax reliefs have been abolished, largely very minor ones. However, why is the majority of help solely for ‘Enterprise Zones’ in urban conurbations – couldn’t this help have been made available for rural businesses?


For retired people living off invested income there appears to be very little. Even the encouragement given to investors in EISs with a rise in the tax allowance from 20% – 30% is only of relevance to people paying a considerable amount of Income Tax. There is even a small sleight of hand with Charitable giving. If you are giving 10% of your estate to charity the 10% decrease in your IHT on examination turns out to be a decrease from 40% to 36%.


Yes there are many good sound bites in this budget – whether these all add up to the stimulus for growth the South West economy needs, time will tell. In the meantime if Old Mill can help you with any issues you have or areas where you need clarification please get in touch with us.


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