- Less likely to succeed than widening tax bands to take in £2 billion
The Chancellor’s forecast that an extra £3.8 billion will be collected in tax by stamping out “disguised remuneration schemes” favoured by hedge fund workers and company directors is likely to fall far short of that target.
Explains Richard Lloyd-Warne, tax partner in our London office: “It is relatively easy to close a loophole but what most tax planners expect is that new schemes will be used to find similar tax savings for high earners.”
“For high earners there is so much potential tax at stake that they are prepared to spend whatever is necessary on legal advice to find the next big legal tax saving scheme.”
Richard Lloyd-Warne says that the Chancellor is likely to have far more success where he quietly takes a slither of extra tax from as wide a base of taxpayers as possible.
Says Richard “This year by switching from the use of RPI to CPI in some tax bands George has put in place a mechanism to collect an extra £2 billion in taxes over the next five years.”
For each individual taxpayer that change in the tax bands will be largely unnoticed.”