What does 2023 have in store for our finances?

Bradley Post, CEO of tax experts, RIFT Tax Refunds, has provided his thoughts on the year ahead and what it means for both businesses and their employees when it comes to their tax related affairs. 

CEO of RIFT Tax Refunds, Bradley Post, commented: 

“Following on from the chaos of the autumn ‘mini budget’, 2023 is a very tough one to call but the predominant hope for many is that economic stability will return to some degree or another. 

We expect that we could see a return of the Social Care Levy, which was previously believed to be the ‘right tax at the wrong time’. It’s clearly still needed, but with rampant inflation and a cost of living crisis hitting many households, 2023 may still be too soon to see it reintroduced. 

One area that remains unclear is how HMRC will treat those who claimed due to working from home during the pandemic. Will this be automatically removed from their tax code? Or will they have to submit a new claim form if they continue to work from home on and off? 

This is going to be a potential minefield for tens of thousands of taxpayers. At the same time, tax thresholds are being frozen again which will push more taxpayers into the higher rate tax band of 40% - anyone earning over £50,270. The only silver lining is that, as salaries increase, the tax refund available is also paid out at a higher rate.

The one thing we need to see is an increase in the mileage allowance rates. This is an area that has been neglected for decades, but at a time of sustained high petrol prices and the high cost of vehicle upkeep. increasing the allowance by just 5p per mile would provide an additional 11% refund which would be worth an average of £95 per year.

We don’t believe there will be any further tinkering with regard to EIS schemes, as the government seems keen to promote investment, however, they do seem intent on giving with one hand and taking with the other where the R&D Tax Credit scheme is concerned. It’s likely they will bring this SME scheme more in line with the current RDEC scheme due to a very small number of individuals abusing the current format and this will have a very negative impact on SME investment and innovation.”