The imminent election has forced the Government to drop planned tax rises on holiday lets and phonelines and to reverse the extra tax on cider as of the end of June.
The Prime Minister called an election on 6 April. This means Parliament is to be dissolved on 8 April and the Government has to push through important legislation quickly. To speed things up it does deals with opposition parties, cutting out contentious measures so that MPs allow the rest through – a process known as the ‘wash-up’. This time, the measures that have been cut include three tax increases planned by the 2010 Budget, two of which would have hit the West Country hard.
Owners of furnished holiday lets have for many years been able to offset the money they spend on their property against their own income tax. This saved holiday let owners an average of a few thousand pounds a year. The Budget set out plans to remove this tax break, but this provision has not survived the wash-up and will not pass into law. This is broadly positive news for the many holiday let owners in the West Country who are thus still able to run their businesses with continued tax efficiency.
The Budget also raised tax on cider at 10% above the rate of inflation. This translates to about 7p per pint this year but, again, the measure has been dropped from the legislation and so the higher tax will only last until 30 June 2010. Again, less tax is good news locally; cider-making is part of West Country heritage and many local firms are involved in cider production and distribution.
The final tax rise to have fallen foul of the wash-up is the proposed 50p per month tax on phonelines.
Slee Blackwell lawyers are able to spot the potential tax implications in your arrangements, and we work closely with local accountants to maximise tax-efficiency for our clients.