Tax allowances can make a significant difference to the running of a practice so it is important to ensure you are claiming any tax reliefs to which you are entitled.
Unfortunately, it looks as though a number of tax allowances are going to be cut, and relatively soon, according to a review by the Office of Tax Simplification (OTS).
The OTS is currently carrying out an inspection of 1,042 tax reliefs, spanning both business and personal allowances, to determine their validity in the current economic climate.
The first 155 tax reliefs have been fully reviewed and the OTS has recently published a final report that recommends 46 of these, or roughly a third, should be discontinued. It is likely that chancellor of the exchequer, George Osborne, will have culled some of them by the summer.
The rejected allowances are diverse and range from personal allowances, such as tax reliefs for the blind or partially sighted, to business deductions, such as those for practice premises renovation work carried out in certain parts of the UK.
Most of these tax reliefs are expected to cause minimal difficulty, unless of course you were planning to revamp your practice anytime soon.
However, there is no guarantee that the remaining 108 tax allowances from the published report will remain, as the OTS has elected to scrutinise 37 of them more closely.
These are potentially on borrowed time or subject to changes. One tax relief singled out for modification is the Capital Gains Tax-free status of private residences.
This particular allowance has not been threatened with elimination, but the OTS believes that more rigorous conditions are required.
Practitioners would be wise to keep a close eye on this project as events unfold to allow timely action should any of their tax reliefs be affected.
On the other hand, staying alert to the field of tax allowances is always a highly recommended course of action – you may even discover some existing benefits that you have not yet taken advantage of.
For more information, please visit www.lansdellrose.co.uk or call Lansdell & Rose on 020 7376 9333.