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Post Covid19 targets for wealth, self and health

Author

Andy Wood

Andy is a practical, creative tax adviser who assists a variety of clients in achieving their personal and commercial objectives in the most tax efficient manner.

Background

 

For many, despite its worries, lockdown has offered a chance to recalibrate the split between work and free time. As such, many peopke I’ve spoken to have been able to enjoy regular leisure and exercise whether working from home or on furlough.

As anyone who has spoken to me (or, more accurately, listened to me moan) in the last few months will testify, I have been suffering with back problems. This has meant walking to the car has been difficult let alone going out for a jog.

Despite this, as a family, we were fortunate that we managed to seamlessly slip in a holiday to Spain in between changing Foreign Office guidelines.

As such, having access to a pool, meant I once again could do some exercise.

As probably one of the worst swimmers in Europe, this is a particularly good form of exercise for me. There has rarely been anything in human history as inefficient as my breaststroke.

So I set myself the target of swimming 50 lengths by the end of the holiday, by adding a few extra lengths each day. By the last, after imbibing much of the pool’s contents and managing to dodge most of the kamikaze wasps, I had managed to achieve my target

As the options seems to close again, overseas travel might be a bridge too far. However, it seems that the COVID crisis will almost certainly be a time for people to set new targets and goals.

 

Business

 

Of course, many businesses have found themselves forced in to an state-induced coma. Some industries closed overnight and other’s have operated for much of the year at a significantly reduced capacity.

Many productive members of society – contractors and freelancers – found that they were not afforded any patronage by Government. Arbitrary lines in the sand meant they were outside of an income support package designed to only protected certain types of income. The justification for such an approach being somewhat thin.

But what next for businesses?

For some, the race, if it ever really stopped, is back on and they will be considering how they make up for lost ground. How do they get there?

For others, the prospect of the CJRS life support being pulled is a scary prospect. How does one survive in these circumstances in sectors which are still far from fully functioning?

 

Individuals

 

As with businesses, not all individuals have fared the same.

Some will have been fortunate to keep their jobs and businesses and, doubtlessly, will have their metaphorical fingers and toes crossed that the worst is behind us.

Others, including many young people, will be dreading the prospect of what the employment market will look like once the Government support packages are unwound as expected over the next few months.

Others will have enjoyed the ‘recalibration’ noted above, and will target making this a permanent change in their lives – whether looking at career changes or setting up their own businesses that fit in with this new felt ‘freedom’.

 

Rishi Sunak

 

The Chancellor needs to target the right balance between replenishing the Government’s coffers and not been seen attempting to try and tax us out of our current economic plight.

He has recently commissioned the Office for Tax Simplification (“OTS”) to conduct a review of Capital Gains Tax (“CGT”). There is also still a review of the IHT system, ordered by Philip Hammond, that he could dust off.

The OTS celebrated its 10th birthday. Yet, over the last decade, the tax system has exploded in volume and complexity.

Will Mr Sunak extend its scope and get it to look at the new fat being added the tax system on an annual basis? A vastly reduced and simplified tax code would be a great help for business and is therefore a desirable target.

Increased rates, a bonfire of reliefs, and / or new taxes will almost certainly be considered and introduced over the coming years.

 

HMRC

 

HMRC has earned a lot of praise over its administration of the various COVID support projects.

However, perhaps pressure will now fall on it to target additional ‘revenue’ from the so-called tax gap.

Generally speaking, most of the marketed tax avoidance has disappeared. The easy revenue targets from DOTAS schemes and Accelerated Payment Notices has gone. Where does this additional income come from next?

 

Wealthy individuals

 

Wealthy individuals will be targeting how they ride the current storm by protecting their assets from creditors and other financial predators (and not just the tax man!)

More have become aware of their mortality and are actively looking at how their businesses and commercial ventures can continue to function if they are incapacitated or not there at all.

They will then be looking at how the financial and tax system will change going forward and what steps they can take to protect themselves from, say, changes to tax systems.

Of course, not all wealthy individuals will solely be considering how to look after their wealth. Many will be actively looking at how they can contribute more to society.

So, whether your target is increasing your swimming capacity or setting up a new business or steering the UK economy through un-chartered waters, I am sure there will be mouthfuls of water and backstroking wasps to avoid along the way.

Best of luck.

 

If you have any queries about this article then please get in touch.

 

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