Shropshire tax expert warns ‘D-Day’ is approaching for top tax rate
Following recent signals from the Chancellor that the 50p tax rate will soon be abolished, a Shropshire tax specialist has called on the county’s business owners to begin their tax planning immediately.
The message comes from Steven Holden, Tax and Trust Manager at Telford-based law firm MFG Solicitors, who is determined that Shropshire’s business owners plan effectively for the date the top tax rate - a levy applying to those earning over £150,000 - disappears.
Mr Holden said: “All the 50p tax rate has created is uncertainty which has been especially difficult for businesses and wealth creators across Shropshire. Although the Treasury was clear in this year’s budget that the 50p rate was a temporary measure, they were not transparent in terms of when it would be erased. With or without that much needed clarity, there is no doubt it is seen as an uncompetitive levy which has only raised marginal amounts for the Treasury’s dilapidated coffers.
“However in recent weeks, spring 2013 has been heavily muted by ministers as D-Day for the 50p rate. This has given a better indication of timescales involved and should also give Shropshire’s business owners and top rate tax payers the impetus to organise their tax arrangements in preparation. There are several attractive measures they can use to prepare themselves.
“For example, independent business owners considering salary increases, dividends or bonus payments can delay these and instead focus on bringing forward their charitable giving and major tax deductable spending on capital assets such plant and machinery. Large capital purchases on equipment will save tax at 50% now but only 40% when the rate is gone.”
“Strategically, there are also options for business owners to consider tax-efficient investments such as life assurance products whilst they can also negotiate with their banks to combine their interest with long term deposits that only pay on maturity. The checklist list can be endless but these are the swift, timely responses business leaders should consider.”
Mr Holden, a passionate supporter within the Shropshire’s business community, added: “It is vital that those affected by the 50p tax rate seize this opportunity, take advice and begin to lay their financial foundations. They may be early moves, but they are smart ones.”
Mr Holden’s timely advice follows recent remarks by Business Secretary Vince Cable who has stoked tensions by hinting the 50p tax rate will be gone by the end of the current parliament, but could be replaced with a tax focussing instead on property and land.
