A tax expert from one of the South West’s leading firms of accountants, Milsted Langdon, has said the Chancellor’s latest speech has fuelled fresh uncertainty among taxpayers and businesses.

Reflecting on Rachel Reeves’ comments to the press in her recent speech, Tax Partner, Rob Chedzoy has raised concerns about growing uncertainty among taxpayers about the Chancellor’s plans.

Speaking this week, the Chancellor refused to rule out tax rises, saying she may have to make “necessary choices” to meet the nation’s growing costs.

While intended to reassure the markets, Rob fears that it has done little to calm anxiety among individuals and businesses who worry about potential tax hikes adding to the cost of living.

“For our clients, there remains a huge amount of uncertainty,” said Rob. “There has been widespread speculation in the press, with well over 50 potential tax measures under consideration.

“That level of noise makes it almost impossible for individuals and companies to plan effectively, particularly around pensions, Inheritance Tax and property sales.”

While the Chancellor’s message that she will stick to her fiscal rules helped steady bond markets, Rob said the continuing speculation has already had a tangible effect on decision-making:

“We’re seeing clients delay major investment and financial planning decisions because they simply don’t know what’s coming,” added Rob.

“In over 25 years working in tax, I haven’t seen this degree of speculation and uncertainty before.”

He added that many clients would prefer a more straightforward approach if tax rises were unavoidable: “If the Government needs to raise revenue, a modest increase in Income Tax would be fairer and more predictable, as it would spread the burden more evenly across taxpayers and could be targeted at higher earners, protecting those on lower incomes.

“Many of the alternative measures being discussed risk adding complexity and undermining years of consistent tax policy.”

Addressing the Chancellor’s use of the phrase “necessary choices”, Rob suggested that it may be an early signal that manifesto pledges could be at risk.

“I think it points towards tax rises and possibly leaves the door open to breaking manifesto commitments,” explained Rob.

“However, I don’t expect her to break her fiscal rules. Doing so would likely have a negative impact on the markets and increase the cost of UK borrowing, which she will be keen to avoid.”