John Whiting of the Chartered Institute of Taxation mulls the implications of the coalition Government.
Both Conservatives and Liberal Democrats had well-developed tax programmes in their manifestos. Blending them together won't be easy.
It seems the Lib Dem flagship rise to a £10,000 personal allowance will go through in stages - but the prospect of paying for it with CGT & Air Passenger Duty rises, restricting pensions tax relief to basic rate, plus a good deal of closing of anti-avoidance/gap-closing doesn't sound like a Tory Budget.
CGT on non-business assets (remember taper relief definitions!?) will shoot up, but surely not totally in line with income tax without some inflation relief? Both see non-doms - and banks - as a source of more tax but in different ways.
There will be some tightening of tax credits for those on higher incomes but one wonders if the impact of higher personal allowances on general benefits is fully appreciated.
Business tax measures do seem easier to blend - the Conservatives want to recast the corporation tax system and achieve lower tax rates combined with a more territorial approach. That doesn't conflict with the main Lib Dem aims of further challenging the use of tax havens and introducing a GAAR.
Agreement on NICs does seem to have been hammered out already - no NIC rises for employers but the employee/self employed increases in rates will go ahead...though whether the Conservatives' ideas on altering the impact of NICs for the lower paid carries through remains to be seem.
And then there is the elephant in the room which everyone has danced around....will VAT go up? No mentions yet of increasing the standard rate - but no denials either.
The next Budget - late June? - is going to be interesting!
John Whiting is tax policy director at the Chartered Institute of Taxation
This article first appeared on IFAonline's sister site www.AccountancyAge.com
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