The phrase ‘A week is a long time in politics’ is usually attributed to Harold Wilson, Prime Minister in the 1960s. As if evidence was needed, 60 years later this is still apt and one only needs to look at the announcement this morning from the current Chancellor Kwasi Kwarteng.
A week ago, the new Prime Minister was trumpeting her new growth plan policy incorporating the abolition of the 45% rate of income tax. And now, just a few days later but following resultant turmoil in the financial markets and Bank of England intervention, the Chancellor has announced “it is clear the abolition of the 45p tax rate has become a distraction” and so the announcement of its proposed abolition has been reversed.
Politically this may be more acceptable, at a time when many households are facing a significant rise in the cost of living. However, on this occasion, perhaps spare a thought for us tax professionals. Having just spent a week discussing with clients the implications of the proposed change and the timing of relevant tax planning, it’s all back to square one. Perhaps we should have spent the last week in bed!
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