Chancellor, Rishi Sunak, will be announcing his Autumn Budget on Wednesday 27th October. As with every Budget and Spending Review, there is already plenty of speculation around about what we can expect to be announced, so we thought we’d try and summarise some of this in advance.
There is a common feeling that this budget will be a more ‘technical’ review rather than one filled with headline announcements – reforming and simplifying existing measures in support of the Treasury.
One thing that seems certain is the Chancellor’s ongoing desire to balance the books to offset the impact of the pandemic.
The main areas we are seeing talk around include:
- Minimum Wage
- Student Loans
- Climate change
Expected changes to Taxes
Already this year significant tax increases have been announced, including freezing personal allowances, rises to corporation tax and the introduction of a new Health and Social Care Levy. This means the UK now faces its highest tax burden in decades and the Chancellor has said it will take some time before he is able to reverse these increases.
BDO reports “Lots of commentators are predicting changes to Inheritance Tax and Capital Gains Tax following recent ‘simplification’ reviews by the Office of Tax Simplification.
IHT is increasingly generating more tax for the Treasury, and it would be quite simple for the Chancellor to ‘simplify’ many IHT rules that result in increasing future revenues without directly changing headline tax rates.
Increasing capital gains tax, possibly by aligning with income tax rates, would be a more visible tax rise but may not collect a great deal relative to the total tax take. Of course, announcing a tax rise for say April 2023, could incentivise asset owners to sell up in 2022/23 and bring a nice cash boost for the Treasury in the short term.”
Expected changes to Minimum Wage
Following the Spring Budget, minimum wage rose, yet a further increase has been rumoured.
Due to the impact of the pandemic, the government is under increased pressure to help employees. In his keynote speech at the Conservative Party Conference earlier this month, Boris Johnson said his goal is to move ‘towards a high wage, high skill, high productivity economy that the people of this country need and deserve”, suggesting a further increase to minimum wage is on the way with reports indicating it may be as high as £9.42 per hour.
Expected changes to Student Loans
Lowering the threshold at which people start repaying their student loan is an initiative that is thought could save the Treasury roughly £2bn per year.
It has been reported that ministers propose to lower the salary threshold and lengthen the repayment term.
On climate measures, Amanda Tickel, head of tax and trade policy at Deloitte, commented “with COP26 around the corner, we expect the Chancellor to make some announcements in line with the government’s pledge of achieving net zero emissions by 2050. These may include incentives for individuals to install home insulation or buy electric vehicles, as well as addressing the current imbalance in energy taxation costs between electricity and gas consumption.”
The Autumn Budget 2021
Of course, for now, this is all speculation, and it won’t be until Rishi Sunak delivers his Autumn Budget next Wednesday 27th October that we will know the true extent of the measures. We will be watching closely and bringing you an update of the announcement shortly afterwards.
For more information about how these measures could affect your business, don’t hesitate to drop us an email via firstname.lastname@example.org and we will be happy to have a chat.