Every firm needs a good accountant to help handle its tax matters and avoid paying too much by establishing just what is tax deductible and areas where rebates can be claimed.
While this will be the case year after year, every tax accountant in Bolton – and everywhere else in the country for that matter – will be watching closely to see what the government’s policy direction on tax is over the coming few months.
The reason this is a matter of uncertainty is because fierce debates about taxation have been a central area of division and disagreement between the various candidates standing to replace the outgoing Boris Johnson as prime minister.
Under the system used to find the new Conservative leader, the MPs have been voting in successive rounds, eliminating the bottom candidate until just two remain. In a close battle, we now know who they will be: former chancellor Rishi Sunak and foreign secretary Liz Truss, with Penny Mordaunt being narrowly edged out.
They will now be taking their message to the estimated 160,000 Tory party members in the country, who will vote for a new incumbent in Downing Street who will be announced in early September.
While the number of possibilities is now down to two, that still leaves different perspectives on a number of issues, tax being the most prominent.
Having been the Chancellor of the Exchequer for most of this parliament, Mr Sunak has presided over significant increases in tax, borrowing and spending, driven not by ideology or manifesto pledges but by the emergency created by the pandemic, as well as a windfall tax on energy firms to help inflation-hot consumers affected by higher energy bills caused largely by the Ukraine War.
However, other measures he has implemented have included breaking one manifesto pledge – not to raise NI – to fulfil another, the funding of improved social care.
The upshot is that Mr Sunak has been accused of being a high-tax chancellor and rivals like Ms Truss have pledged significant tax cuts at an early stage. She has used her campaign website to list what the “core Conservative principles” of a government led by her would be, with the first thing mentioned being “low taxes, a firm grip on spending, driving growth in the economy”.
Mr Sunak has argued this is not fiscally sustainable. He said: “Of course I want to cut taxes and I will deliver tax cuts. But we will do that in a measured way.”
Cynics might argue tax-cutting pledges are what everyone likes to do when seeking election and different to what will actually happen when they are in office. But given that the new prime minister will have a general election to fight before the end of 2024 and an electorate feeling the financial strain, there will be pressure to put more cash in people’s pockets.
Personal taxation will only be part of the equation, of course. Small businesses will be looking at what their burdens will be under a new regime, which is why what happens next will matter.
For now, the outcome is uncertain – except the fact that neither remaining candidate will be rushing to appoint the other as Chancellor.