One aspect of the economic downturn (we should not technically call it a recession at this stage) is that the government is likely to have less income (in real terms) as businesses make smaller profits for them to tax. And provided wage inflation is held down – as we must all fervently hope it is, if a pernicious inflationary spiral is to be avoided – then the income tax ‘take’ will not rise very fast, either.

Add to this a dramatic drop in Stamp Duty Land Tax, due to the fall in house sales (as well as a self inflicted injury by the Chancellor failing to confirm whether or not a moratorium will apply) and the Chancellor must wonder where his next stealth tax is coming from.

Fortunately, help is at hand with reports that councils are to be advised to increase parking charges. This is ostensibly to help reduce congestion in town centres (which it could, at risk of killing them off, commercially) and to help small town-centre shops (which latter is blatantly absurd, since if people have to pay more to park in town centres, they will simply go ‘out-of-town’).

In fact, this looks like more like a desperate act from an increasingly worried administration that has spent too much of our money, based on virtually unmanaged borrowing. Unfortunately, taxing motorists seems to be taking on the characteristics of an Olympic sport; and one where this government appears to be determined to take gold (see Retrospective tax).

There are, of course, some areas of taxation that are impossible to avoid, but others like inheritance tax are almost “voluntary taxes for those who distrust their heirs more than they dislike the government” as Lord Jenkins of Hillhead (the former Labour Chancellor, Roy Jenkins) famously said. Similarly, income tax can be reduced by retirement planning and the use of tax exempt investments such as ISAs.

Even Capital Gains Tax can be minimised by judicious use of the exemptions available.

Planning is essential; why not contact Robert Bruce Associates for assistance?