Interactive Investor

Tax Day plans ‘pave the way’ for future reforms

23rd March 2021 15:42

Rebecca O'Connor from interactive investor

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interactive investor comments on the government's follow-up to the Budget 2021.

The government this afternoon published a follow-up to the Budget 2021 – a document outlining a series of consultations and measures that overall, pave the way for future changes. The proposals also seek to iron out kinks in the current tax system.

Becky O’Connor, Head of Pensions and Savings, interactive investor, said: “The government’s ‘Tax Day’ consultations paper proposes a series of measures that overall, make it easier for people to pay tax and harder to avoid it.

“For pension holders and investors, there is little in the document to suggest any swingeing changes to come, but it could just be a case of cans being kicked down the road.

“Changes to the criteria for holiday let owners will cause a headache for some who had properties ‘available to let’, saving tax, despite not letting them out.

“Measures to make the administration of inheritance tax matters on a relative’s estate when they die less onerous, could make this difficult task a little easier for families.

“Big pensions measures were notable by their absence. There were no proposed changes to equalise pensions tax relief for all taxpayers, for example, as had been rumoured.

“Already planned changes to the Dormant Assets Scheme expansion, which will encompass investment and pensions, will be legislated for in a future Finance Bill.

“There are some technical updates to pension tax rules, forming part of a remedy to 2015 public service pension reforms, which had resulted in some scheme members losing out. The Guaranteed Minimum Pension will continue to be indexed for public sector employees who reach state pension age after April 5 this year.

“If the chancellor is thinking about how to make big reforms to the UK tax system, it doesn’t look like today was the day to do it. Overall, the changes iron out kinks in the existing system and pave the way for future reforms.”

Notes to editors

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