A week before the EU referendum, the Chancellor of the Exchequer, George Osborne, warned that a vote to leave the EU might result in tax increases too. He spoke about a 2p rise on the basic tax rate (currently 20p in the pound) and a 3p rise in the higher rate (currently 40p). He also said Inheritance Tax (IHT) might rise by 5p from its current 40p in the pound. But to do so would go against the Conservative Government’s promises at the last general election, making this decision to implementdifficult politically.
Many commentators believe the Government would be much more likely to extend the period of austerity beyond 2020. The Institute for Fiscal Studies (IFS) said that spending might need to be curbed for two further years.
During the referendum, the Vote Leave campaign said it wanted to remove the 5% VAT charge on domestic fuel that is currently required by the EU – but it is not clear how or when this could be achieved.
The UK’s tax authority is stressing that ‘no laws have changed’ and that tax rules remain the same following the EU referendum. ‘Everything is continuing as normal. No laws have changed. There is no need to contact HM Revenue & Customs as a result of the EU referendum.’
Changes to financial regulations will inevitably change in time following the UK’s vote to leave the EU. However, a recorded message on the HM Revenue and Customs (HMRC) helpline stated that nothing has changed in the immediate aftermath of the vote.