In case its slipped your mind, it's 'Budget' month and on April 22nd the Chancellor, Mr Darling, will take his place in Parliament and be forced to tell us the really bad news about the British economy.
No more boom and bust, I'm sure or even any suggestion perhaps of fiscal prudence or 'You've never had it so good.' Instead, I predict, you and I are going to pay through the nose either through direct or indirect taxation (this Government's favourite trick) and if you do have any savings, then don't expect much help at all if you have been sensible or prudent with your own finances during your career.
The Chancellor is expected to reject the option to abolish the basic rate of income tax on savings income, according to reports. However, he may deliver some policies to help pensioners and savers, including an increase in the Individual Savings Account Limit but this is unlikely to mitigate the impact of very low interest rates which see average personal savings giving a return, two percentage points below the rate of inflation.
It's predicted that familes will face an extra £1,250 on tax bills to pay off Government's recession borrowing and The Institute of Fiscal Studies (IFS), has produced detailed estimates on the damage done to the public finances by the recession. A shrinking economy and falling revenues means the Government will need to find another £40 billion.
Despite already announcing a new 45p higher rate of income tax and a rise in National Insurance, a range of other future tax rises are now understood to be under consideration by the Treasury. This could include an increase in VAT to as much as 20% according to Government documents.
In order to make collection of taxes a little easier, the law changed this month giving us all the trappings of a true Police state without any of the benefits and should be a source of concern to all small businesses and sole traders. An officer of HMRC can come knocking on your door, unannounced, in the early hours of the morning and demand items or documents of interest. Declining access to these so-called ‘real time’ visits will result in a penalty.
There's the following note on the small business advice site: "Remember that with HMRC you are treated with suspicion of being guilty until you can prove you are innocent – it’s a subtle difference to our usual approach to justice but has big ramifications for those in the hot seat."