This week the UK will head to the ballot boxes and choose its next government.
It follows an intense month of campaigning, televised debates and party manifestos.
We have heard promises and arguments for the introduction of numerous policies and tax changes from all parties, including the addition of VAT to private school fees, cuts to national insurance, changes to capital gains tax and the increase of income tax thresholds.
With so many new ideas being thrown around, it inspired our firm to stop and have a think about what we would like to see from the next UK government – whoever it may be.
Here are the five changes we agreed on and the areas I would prioritise if I were tasked with being the chancellor for a day.
Simplify the UK tax system
One of our tax partners at HW Fisher, Stevie Heafford, puts it perfectly: “The next government should take a fresh look at the tax system and refocus it on two key principles: common definitions, where everyone understands what the rules are, and common sense, for when they should apply.”
I agree entirely. For too long – and last month was a prime example of it – we have seen tax being used as a political tool.
We have seen too many changes introduced as a knee-jerk reaction and without proper thought for the consequences.
All legislation needs to be more carefully thought out and all impacts considered before it is passed.
Simplifying the tax system would benefit everyone, and agreeing on one set of rules and sticking to them would give the country the stability it has been wanting for a long time.
Fix the UK’s rental market
According to a report by the estate agents Hamptons, there were 40 per cent fewer rental homes on the market in 2023 compared with 2019. This will not come as a surprise to many advisers.
Higher interest rates, alongside tax and regulatory changes, have forced many landlords to either sell up or increase their prices. Meanwhile, the increase in rental costs is leaving many first-time buyers with less cash at the end of each month to save for their own property.
It’s a catch-22, and the government needs to intervene to break the cycle by reviewing how the tax system can help the market operate more efficiently.
This could involve the removal or reworking of the restriction on mortgage interest tax relief for landlords, or the introduction of new measures to make it easier for first-time buyers to get on the ladder.
Invest in HMRC to provide a faster service for all
I believe I speak on behalf of all accountants when I say there is nothing more frustrating than trying to get in touch with HM Revenue & Customs.
Call-waiting times are at an all-time high, responses take forever and getting hold of the person you need is borderline impossible.
This is causing serious delays at all stages of interaction. Tax enquiries are taking too long to solve and repayments are slow to process.
