blog header image

Posted : 15 Jul 2020 at 18:17:03
Category: News

Share this article

The chancellor has commissioned a review of Capital Gains Tax (CGT) to examine how gains are taxed in comparison to other types of income.

The office of Tax Simplification (OTS) will undertake the review of CGT and how the chargeable gains of individuals and smaller businesses are treated.

In a letter to the OTS, chancellor Rishi Sunak wrote: “This review should identify opportunities relating to administrative and technical issues as well as areas where the present rules can distort behaviour or do not meet their policy intent.”

He added: “I would be interested in any proposals from the OTS on the regime of allowances, exemptions, reliefs and the treatment of losses within CGT, and the interactions of how gains are taxed compared to other types of income.”

The chancellor’s request for a review comes as the Office for Budget Responsibility (OBR) said the UK faced “an unprecedented peacetime rise in borrowing this year to between 13 and 21 per cent of GDP (Gross Domestic Product)”.

The OBR added that the outlook would have been much worse without the measures the government has taken.

Declining CGT revenues

In its July report, the OBR also forecast that there would be sharp declines in CGT receipts from 2021-22 onwards, averaging £4.6bn a year.

It said this was largely down to the steep fall in share prices at the beginning of the pandemic which have only partially recovered.

According to a report in The Times, the CGT review could mean the treasury collects billions of pounds in tax to pay for the pandemic.

But health secretary Matt Hancock denied that was the case. Speaking to Sky News he said: “As far as I understand, there is no proposal and the chancellor is not looking at tax changes now.

“We’ve just had the summer economic statement and apparently reviews like this are normal all of the time and not connected to any decision one way or the other.”

A Treasury spokesperson said: “It is standard practice to keep taxes under review. Over the last few years the OTS has reviewed most of the major tax regimes apart from CGT, and a review of CGT will now complete its review of all the major taxes.”

SIMILAR NEWS

blog header image
NEWS
CITB PROPOSES TAKING LEVY BACK UP TO PRE-COVID FIGURE

The Construction Industry Training Board (CITB) has proposed hiking its levy back up to pre-covid rates from 2022 as it launches a consultation into its funding proposals. The skills body had suspende ...

blog header image
NEWS
SELF-EMPLOYED WORKER NUMBERS 13% DOWN ON PRE-COVID LEVEL

Numbers of self-employed workers are slowly returning to the pre-Christmas level despite worries that many eastern Europeans would not return after the break. According to the construction industry& ...

blog header image
NEWS
CONSTRUCTION CONTRACT AWARDS DROP BY 12% IN JANUARY

The value of construction contract awards decreased by 12% in January to £4.3bn, 10% lower than the monthly average in 2020 When compared to December, construction contract awards in Januar ...

blog header image
NEWS
UBER HAS LOST IN THE SUPREME COURT. HERE’S WHAT HAPPENS NEXT

Uber has lost a landmark case in the Supreme Court and must now classify drivers on its platform as workers. The ruling entitles Uber drivers to minimum wage and holiday pay, protections they were una ...

blog header image
NEWS
REVERSE VAT IS FAST APPROACHING

VAT registered construction businesses are advised to be aware of the reverse charge measure that is to be implemented from 1 March 2021. Letters were distributed to every VAT registered construction ...

blog header image
NEWS
HOW CONSTRUCTION CAN FIX ITS IMAGE POST-PANDEMIC

The new year is barely under way, yet it has already brought with it momentous change – new vaccines for COVID, being delivered at phenomenal pace; a potentially balanced political backdrop with ...

business-directory Business Directory
smartbusinessdirectory Payroll Services Business Directory
truebusinessdirectory payroll-services Directory
payroll-services Directory