You might hear politicians talk frequently about tax cuts in the weeks before the election in efforts to win over voters but history tells us that these promises often turn out to be false promises.
Theresa May claimed recently that the conservatives won’t increase VAT rates if they are re-elected and even Labour, traditionally regarded as the party of high taxes have claimed likewise. However as the BBC reported this month, the Institute for Fiscal Studies has advised against make tax promises that almost inevitably won’t be kept if the next government has any ambitions to close the deficit and provide much needed extra funding for the NHS.
Previous elections have also shown that the temptation to raise taxes is often irresistible when the honeymoon period of an election win subsides and reality sets in. This should alert business owners of the possibility that even if the VAT rate stays as it is, national insurance, income tax and corporation taxes could all be increased under the next government.
This would mean an increase in deductions from staff wages, increased costs for businesses and pressure to increase wages. This makes now an ideal to time to consider company finances.