The issue of tax has been at the heart of the recent political turbulence and while that may have seen a swift turnover of prime ministers and chancellors, it is businesses and the self-employed who may be spending the most time wondering whether they are coming or going.
Higher earners seemed set for a cut to the top rate under the mini budget set out by Kwasi Kwarteng in September, while banker’s bonuses were reinstated and various business tax breaks were announced.
Indeed, while the whole strategy – along with the political careers of Mr Kwarteng and Liz Truss – were to swiftly unravel, the fact was the pro-business moves were praised by the Federation of Small Business (FSB).
Moreover, when Rishi Sunak took over In Number 10, the FSB national chair Martin McTague urged him to ”see through the delivery of the energy support package for small businesses” that parliament had just voted through.
Tax accountants in Manchester will now be needed to help work out the implications of what comes next. The new chancellor Jeremy Hunt has warned of some “eye watering” decisions to be made and as austerity may be unpopular at a time when the cost of living is so squeezed, tax rises are expected.
It remains to be seen just what Mr Hunt will announce this month, but pre-Budget speculation has seen several significant measures mooted. For instance, the Financial Times and Daily Telegraph have reported he may cut the threshold for top rate tax, bringing more people on good incomes into the top bracket.
The Daily Mail said Mr Sunak and Mr Hunt were looking to “think the unthinkable”, which might even involve raising the top rate, as well as some new stealth taxes, halving the tax-free allowance on capital gains tax and higher Council Tax.
It remains to be seen just what does happen, but what seems very unlikely is the status quo remaining in place. That means it will be important for businesses and individuals to work with their accountants to find the best way to deal with the various tax measures that will be announced.