The UK General Election has been announced for the 4th of July and the campaigning is well underway. During last week’s manifesto release, both the Conservative and Labour parties promised a number of tax reliefs and changes.
With all these proposed changes, you may be wondering how to prepare. In this article, Dan Tomassen, Tax Manager at HW Fisher explains the process from election to implementation.
What’s the process?
Whilst the upcoming election will determine who will be leading the country for the next five years, any changes to the tax rules are unlikely to be implemented for a while, providing you with plenty of time to plan properly.
The Labour party, who are currently leading in the polls, have said that if they win a majority then they will not be calling a snap Budget. Instead, they intend to have the Budget in September, providing time for forecasts to be prepared on the impacts the proposed changes will have to the economy.
Once the Budget has been announced, the Finance Bill will be drafted, debated, and approved by both the House of Commons and the House of Lords. Once the Finance Bill has been approved, it will receive Royal Assent and then it will inform the UK’s tax legislation. In most cases the laws will apply from the start of the next tax year, being 6 April 2025. In certain cases, the new rules apply from the date of the Budget and sometimes, although rarely, they will be applied retrospectively.
Retrospective legislation is only used in certain circumstances where it is believed that if the law was not introduced at that date, then there would be a significant loss to the Exchequer. Labour is unlikely to introduce too much retrospective legislation since it would create uncertainty for businesses, therefore reducing the attractiveness of the UK for businesses, and potentially deterring international businesses from setting up shop in the UK.
Our advice
We advise all those looking to plan ahead of the UK election to seek expert advice before making any extreme or rash decisions. When Labour threatened to reintroduce the Lifetime Allowance, some pensioners drew lump-sums from their pensions, only for Labour to change their minds and announce that they would not reintroduce the limit if they won.
Individuals or businesses planning to minimise the impact of a new government should follow the mantra “slow and steady wins the race”. If you would like tailored advice, you can contact Daniel Tomassen here.
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