One of the headlines in my newsfeeds today is “Biggest peacetime deficit caps extraordinary year for UK public finances”.
Reading the article left me wondering what would happen if we (Joe Public) ran our household finances the same way! The provisional deficit for the year is £303bn, equivalent to 14.5% of the UK GDP.
Alison Ring, ICAEW Public Sector Director, says “… , even as the economy starts to recover, the legacy of higher debt and a greater exposure to changes in interest rates will be with us for years, if not decades to come. The public finances were already on an unsustainable path before the pandemic, and the government will need a long-term strategy for rebuilding them.”
Translating that to normal everyday language, that means somewhere along the line taxpayers are going to have to cough up for all of this! So, without getting into a debate about the rights and wrongs of world governments forcing repeated lockdowns and then funding the Covid disaster, the bottom line is that governments everywhere are going to be looking for ways to squeeze a bit more out of the system.
That means, we (the taxpayers) need to make sure we do all we can to claim as much back as possible. These claims come in the form of reliefs, expenses and allowances.
It’s common cause that it’s against the law to steal taxes but we are legally entitled to claim as much back as the law allows! And, in today’s world, that covers income tax, indirect taxes, capital gains taxes and death taxes.
Sadly, the tax world is VERY complex and it’s easy to get it wrong with potentially expensive consequences. That means, right now, one of your best friends should be your tax advisor and, if you don’t have one, it would be a good time to get one!!!
For those of us who have migrated and have exposures in more that one tax jurisdiction, life is even more complex. For example, if you have a property in SA that you’ve rented out, the bond interest is deductible in SA but not directly deductible in the UK. Getting that wrong will cost you money – either in penalties or unnecessary tax payments.
As emigrants, we also get presented with a unique opportunity to park our capital where it won’t be subject to future Capital Gains or wealth taxes. If you are in the fortunate position of not needing all your capital to get your new life started then this opportunity is NOT one you should be missing.
So, to all the SAFFAS out there – get in touch with us at sauktax.co.uk so we can help you navigate this minefield. But please remember, while we will happily give some free advice, we also have bills to pay so would appreciate you not abusing the “privilege of free”.