Looking ahead to the Autumn Budget
With an Autumn budget on the not too distant horizon we have been looking at some of the areas where we might see tax system changes announced.
Budget speculation begins
The Times’ Mark Atherton kicks off speculation about the Budget, with predictions of a cut to Capital Gains Tax relief and pension tax relief for higher and top-rate taxpayers. We’ll have to wait and see what happens there
National Insurance Contributions U-turn hints at tax rises
The chancellor’s decision to scrap a government pledge to abolish Class 2 NICs for millions of self-employed people is a warning of stealth taxes to come, experts have suggested. Andy Chamberlain, of the Association of Independent Professionals and the Self-Employed, said the government appears “intent on squeezing as much revenue out of the self-employed as possible.” Jason Hollands, the managing director of investment manager Tilney, added: “I think that stealth taxes are coming.” Meanwhile, the Sun reports that Philip Hammond is also planning to raise money for the NHS by axing the £31m New Enterprise Allowance that helps people start their own business. The Federation of Small Businesses said that such a move would be “shortsighted”.
Hopes for higher corporation taxes
Some are hoping that the chancellor might raise or place minimum requirements on corporation tax. Tom Kibasi, Chairman of the IPPR Commission on Economic Justice, writes to the Telegraph to defend the commission’s proposal for an “alternative minimum corporation tax”. He says the proposed measure would help create a level playing field by preventing “irresponsible multinationals” from disguising their true UK profits. Elsewhere, Brian Monteith, director of communications at Global Britain, argues that a no-deal Brexit would boost corporation tax revenue. He says that if the UK leaves the Single Market, then higher tax contributions should inevitably follow as companies would not be allowed to post their UK turnover into other EU jurisdictions.
We are never 100% sure what the chancellor is thinking but Hospitality industry leaders have urged the Chancellor to abandon any plans to introduce a tourist tax, warning it would wreak havoc “on an already strained and over-burdened sector”. FSB chairman Mike Cherry said: “Our visitor economy is a huge success story, contributing more than £125bn to the economy annually and providing vast tax receipts to pay for public services. Small firms operating in the tourism sector are already up against high business rates, rising employment costs and surging input prices, particularly where utilities are concerned. Adding tourist taxes to the mix would mean yet another reason for small B&B, hotel and hostel owners to spend time away from running and growing their firms.”
Hammond facing backlash over tax-raising plans
Pensions experts have warned Philip Hammond against raiding middle class savers’ pensions to fund a public spending spree. The chancellor is reportedly plotting to cut tax relief in an effort to raise an extra £20bn for the NHS. Baroness Ros Altmann, an ex-pensions minister, said: “There’s a huge amount of resentment against changes of this kind, particularly among Conservative voters, because there would be quite a lot of losers.” Steve Webb, policy director at Royal London, added: ‘Pension tax relief shouldn’t just be used as a pot of cash when money is short.” Meanwhile, the Mail’s leader criticises plans to target small business investors, the self-employed and those who save into private pensions. It accuses Mr Hammond of wanting to tax enterprise, initiative and thrift.
Charterhouse will be ready to comment and provide analysis
Whatever happens at the next budget – and it seems to be a very fluid political situation at the moment with a Brexit deal or no-deal pending – you can be sure that Charterhouse will be quick to comment. Watch out for our Post-budget analysis!
Charterhouse works in partnership with its clients to provide accountancy and cutting edge tax expertise. Located in Harrow we serve clients in Watford, Wembley, High Wycombe and throughout the UK, Charterhouse writes blog and news articles to help provide insights and expert advice.