Recent reports of the Chancellor's comments ahead of his Autumn Statement 2013 (Dec 4th) suggest that two legitimate tax planning initiatives widely used by contractors could be the subject of restrictions or cut backs. The Chancellor reportedly said there was "no pot of money for tax sweeteners" in his upcoming statement.
Though not confirmed, the Sunday Telegraph was told of a proposed cap on the amount which can invested and held in tax-free ISAs (Individual Savings Accounts). A cap value of £10,000 was mentioned.
At the same time, the Sunday Times reported that Entrepreneurs Relief could be cut back or removed as part of the next election, as the Government looks to reap an increased Capital Gains Tax take on the back of a recovering economy. ER is often used by contractors to legitimately reduce the amount of tax they pay when they close a limited company.
Small and medium sized businesses have been identified as the biggest contributor to the UK's 'tax gap' - accounting for half the difference between what tax HMRC believes it should collect what it actually receives.
Watch this space...