More bitter pills than giveaways in next week's budget
The first majority Conservative Budget for nearly 20 years will be presented to Parliament on July 8 and, as it is the start of the parliamentary term, we can expect some bitter pills to swallow. So, what should we be prepared for?
Pledges in the Conservative manifesto could be included, but it is likely any giveaways may have their introduction delayed.
We already know from the Queen's Speech that by 2020-21, the personal allowance will rise to £12,500. Also, a new law will ensure that no one working up to 30 hours a week on minimum wage will ever pay income tax.
In their manifesto, the Government pledged that no-one earning below £50,000 would pay higher rate income tax - up from the current level of £42,385.
There has been much publicity about the triple tax lock commitment. This seeks to ensure there are no rises in income tax, Vat and National Insurance (NI). It will also ensure the NI upper earnings limit, the point where the employees' contributions rate falls to 2%, is no higher than the income tax higher rate threshold.
There will be no extension to the scope of Vat. This is intended to be for the next five years, but the devil is in the details and we wait to see what get-out clauses may be included if public finances make this untenable.
Capital gains tax was not included in the tax-lock commitment, and this is a favourite for chancellors to tinker with. The rate could rise from the current 28% for higher rate taxpayers. There is much thought about cuts to the generous 10% rate applicable to business entrepreneurs.
The increase in the inheritance tax (IHT) threshold to £1m for married couples and civil partners is not as simple as it sounds. The £1m headline figure is made up of the £325,000 nil rate band, plus a new transferable allowance of £175,000 per person.
The transferable allowance is available when the main residence is passed to their children. It will apply to transfers of the main residence in their lifetime. It will also taper away for those leaving over £2m. Those leaving over £2.35m will not benefit.
To pay for this new transferable main residence IHT allowance, the annual allowance for pension contributions will be reduced for those earning over £150,000. The overall limit - known as the lifetime allowance - on the total amount of tax-relieved pension savings an individual can have over their lifetime will be reduced from £1.25m to £1m.
The high income child benefit charge was introduced in 2013 and applied to individuals whose income exceeded £50,000. This was felt by many to be unfair, as a couple earning £49,999 each was not affected, but a couple with perhaps just one income over £50,000 was, so we may see new legislation bringing more couples within the charge where joint income exceeds, say, £80,000.
The annual investment allowance of £500,000 is due to end this December 31 and go back down to £25,000. The Chancellor hinted in his March budget that he would announce in his Autumn Statement that the allowance would not fall back to £25,000. It is hoped he will make this announcement sooner and that there will be a permanent increase to allow businesses to plan their capital expenditure.
In recent times, the Chancellor has been keen to give tax incentives to creative industries via tax credits. It is hoped this will be expanded in the coming budget.
Louise Williams is a senior manager in taxation at accountants RSM in Belfast