10th October 2017
Preparing for the Autumn Budget
In his Autumn Statement of 2016, the Chancellor, Philip Hammond announced a move to a single fiscal event each year. This means there will be a single Budget, delivered in the autumn of each year, starting in 2017.
This is primarily so that Royal Assent can be obtained for finance bills that follow the Budget, in time for the start of the new tax year in the spring, and so that changes to the taxation system are announced well in advance of the following April.
What will change?
The only major difference is that the UK will make changes to its tax system once each year rather than twice. From 2017, a Finance Bill will be introduced after the Autumn Budget, in exactly the same way as it has followed the Spring Budget previously.
There will still be a Spring Statement, to allow the government to respond to the 6-monthly forecast from the Office for Budget Responsibility. The government has reserved the right to change policy in the Autumn Budget.
What can we expect?
The budget is still several weeks away, but the Chancellor is being urged to consider a number of measures, including:
- Reducing stamp duty – researchers believe the current rates of stamp duty are preventing older homeowners from downsizing, which is slowing the housing market.
- Easing austerity measures – a recent ONS survey showed that the UK’s borrowings in the last year are the lowest since the financial crisis. This gives the Chancellor some flexibility in spending which may see an easing of some of the more contentious austerity measures.
- Increasing support for low-income families – research from the Child Poverty Action Group suggests that cuts to welfare support and rising inflation are making life very difficult for those families on low incomes.
- Enterprise Investment Scheme (EIS) – these schemes have allowed individuals to invest in high risk companies in return for 30% tax relief and CGT exemption on the disposal of shares after a certain period. It’s thought that the Chancellor may reduce the relief rate, and increase the length of time that shares must be held in the target company. Changes may also be made to the related Seed Enterprise Investment Scheme.
- Committing to HS3 – industry leaders across the north of England recently signed a letter to Teresa May asking for a clear commitment to improving road and rail infrastructure in the region, which they believe will improve business, boost the economy and create jobs.
- Pension tax relief – it is thought that the Chancellor may set a flat rate of around 33% for pension tax relief, rather than retain the current system where relief is linked to income tax rates.
- Domestic air duty – Heathrow has written to the Chancellor asking him to consider removing all air passenger duty for domestic flights which, it says, currently costs UK travellers £225m each year.
- Student fees and loans – In her recent Conservative Conference Party speech, Theresa May spoke about freezing student fees at the new level of £9,250 and raising the annual salary at which repayments start.
Highlights from the Autumn Budget will be presented in a summary document available to download from the Resources section of our website from 24rd November.