Pensions - Articles - Special Tax Day announced for 3 weeks after the Budget


Steven Cameron, Pensions Director at Aegon, comments on the special ‘tax day’ scheduled three weeks after the Budget.

 Announcement of ‘tax day’ gives chancellor two bites of the tax cherry

 Last week, Financial Secretary to the Treasury Jesse Norman announced that to allow for more transparency and scrutiny, some documents and consultations that would traditionally be published at a Budget will instead be published on March 23. Announcements that require legislation in the next Finance Bill or have an impact on the government’s finances will be part of the Budget. But others such as those concerning the future administration of tax will be held back with consultations launched three weeks after the Budget.

 Steven Cameron, Pensions Director at Aegon comments: “The announcement that this March we’ll have not only a Budget on the 3rd but a ‘tax day’ on the 23rd opens up some new options for the chancellor, giving him ‘two bites of the tax cherry’. Many have speculated that March 3 is too soon to be making final policy announcements on future tax policy, with the Government only now able to give an indication of their roadmap out of lockdown. However, after cancelling his Autumn 2020 Budget, Rishi will be keen to give some early indication of his higher level plans to return the nation’s finances to a sounder footing.

 “Tax day on the 23rd is billed as focussing on tax administration, launching consultations on matters such as introducing a digital approach to assessing and paying taxes. While perhaps less eye catching than some ‘rabbits from hats’ Budget announcements of recent years, these can be very important to get right. Moving the detailed consultations away from Budget day offers tax experts an opportunity to give their considered input.

 “In a similar vein, there is nothing stopping the chancellor setting out a wider range of high level intentions in his Budget, for example any proposals for reforming pensions tax relief or wealth taxes, but then carrying out detailed consultations to get the detail right and avoid unintended consequences. Radical changes of this nature are complex and while a ‘rate’ of tax can be changed quickly, a system of tax or tax reliefs take longer to put in place. A period of consultation followed by implementation perhaps next April could mean the chancellor can deliver the right changes, delivering intended benefits, in an orderly manner.”

 https://www.gov.uk/government/news/government-to-publish-range-of-tax-consultations-and-calls-for-evidence-on-23-march
  

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