Leading accountancy firm warns of potential tax rises

kate moore Leading accountancy firm ktsowensthomas is warning business owners and investors to plan with caution ahead of the potential tax rises expected to be announced in the emergency budget.

ktsowensthomas is advising business owners and investors to prepare for a two fold increase in Capital Gains Tax (CGT) in the Tory-Lib Dem budget being outlined on June 22nd 2010.

On the importance of planning ahead for the proposed increase, Kate Moore, senior tax manager at ktsowensthomas said: “The rise in capital gains tax from 18% to 40% or more could lead to investors and businesses selling off non business assets over the next few weeks to avoid being hit with increased tax duty.”

With investors and business owners likely to start selling off shares and second homes to try and avoid the proposed rise in capital gains tax, Miss Moore said: “Details are still currently limited, but with CGT expected to dominate the new budget, business owners and investors should look into the implications of the rise before making any decisions.”

“If the rise on capital gains tax goes ahead, the increase will either be imposed from the start of the next tax year or could even be back dated from April 2010. If it is the latter, investors who sell now could be stuck with a 40-50 per cent tax bill on their gains. If businesses were not planning to sell non business assets off, they need to weigh up the potential risks.”

Additional revenue from the tax increase could be used to fund the proposed change to the current income tax exemption, expected to take place in April 2011, raising the income taxation to a planned £10,000 in this parliament, in turn benefiting low income earners.

ktsowensthomas is also warning businesses to expect the budget to include additional reforms, Miss Moore continued: “The emergency budget in June will outline how the new collation government will tackle the UK’s debt. With such a sizeable deficit to tackle, other increases expected to be included in the emergency budget are an increase in VAT and further powers for H M Revenue & Customs (HMRC) with harsher penalties for tax evaders.”

ktsowensthomas is a firm of accountants, tax and business advisors with a head office in Cardiff Bay and a regional office in Aberdare covering Rhondda Cynon Taf, Heads of the Valleys and Mid Wales. For more information contact Kate Moore on 029 2082 9000 or visit www.ktsowensthomas.com

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