A North East financial expert has responded to the plans set out by Chancellor of the Exchequer Rishi Sunak’s Spring Statement.
Jon Meeten, head of tax for the North at KPMG UK has issued a statement in response to Sunak’s announcement which will see a cost of living squeeze, a fuel duty cut and National Insurance threshold raise.
Meeten said: “On paper these are pretty expensive rabbits to be pulling out of the hat, though the impact of fiscal drag in a high inflation environment has given more than enough headroom to do this.
“Tax advisors across the country no doubt got excited on hearing that there would be a new ‘tax plan’, but what actually landed was light on detail, making it still quite difficult to read the tea leaves when it comes to the government’s long-term tax strategy.
“There were very few clues as to how the government plans to address the numerous cliff edges and distortions that exist in our tax system. Standing firm on the national insurance rise will likely increase division between the taxation of employment income and those that receive pensions or rental income.”
The KPMG accounting firm tax head added that there were telling pieces of the statement that could show where the government is moving regarding corporation tax and tax policy.
Meeten said: “The Chancellor did offer some hints on where he is heading on corporate tax. His preference seems to be to keep the rate hike to 25% next year, but compensate for this with a narrowing of the tax base.
“A lot of difficult decisions have been kicked into the autumn but the Chancellor’s promise to consult with businesses before introducing significant tax policy changes is encouraging – although perhaps not for those tasked with responding to the mountain of tax consultations that are inevitably in store.”
Meeten’s statement comes just days after Rishi Sunak MP announced the Spring Statement, outlining the current economic plan for the UK.
Hopes of a 3.8% rise in economic growth has been predicted for the UK, as well as a fuel duty cut of 5p per litre and a pledge to cut basic tax rates from 20p to 19p.