That time of year again…

That time of year again…

On 27 October 2021, the Chancellor Rishi Sunak will deliver his Autumn Budget.  It’s a significant milestone for him, as since he became Chancellor in February 2020, the world has changed a lot, in every sense of the word.  Many believe that this could be an opportunity for the Government to ‘do some good’ but there is of course an underlying concern that costs of COVID and Brexit will need to be met somehow, somewhere and sometime soon.

As with all Budget announcements, the devil is in the detail, and many believe that this will be quite a technical Budget, hoping that it will address a number of issues. You tend to find that with the release of the latest Apple iPhone or Samsung Galaxy handset, the rumour mill runs for months prior to the actual ‘big day’, producing various ideas of what might be new, changed or updated.  With a Budget, you could make the same comparison, as there have been a number of reviews and pre-cursor announcements made in some important areas, but as with phones, you’ll have to wait until the day to find out.

Everyone wants to know if the UK’s recovery from the events of the last eighteen months is on track, and what the story is with inflation, but what are the other key issues? Here is top five likely candidates:

1. Income tax – the recent introduction of the Social Care Levy from next year is seen by many as a tax by any other name, so will there be more of this to come in the Budget?
2. Capital gains tax – there have been reviews done and findings reported, but still no word on what if any changes the Government will implement.
3. Inheritance tax – often described as a voluntary tax, and seen as a tax on the wealthy, but changes made to how the rules apply (for example with residential property) could result in nasty surprises for the wider populace.
4. Pensions – as more workers get better efficiencies through salary sacrifice schemes, tax relief on personal pensions could take a bashing.
5. Business incentives – as Government COVID support finishes, what other incentives may be made available to businesses to help reduce tax costs and increase liquidity.

Obviously, devolved tax rates aside, balancing the books is not going to be an easy task this time around.  I’m sure Rishi knows he can’t please all of the people all of the time, but whenever there is a Budget around the corner, it makes me think of an old joke; the one about the man who thumps a smiling fortune teller because he was told to ‘strike a happy medium’.   The irony isn’t lost here on me either, as a working crystal ball would be exactly what the Chancellor needs right about now.

We’ll keep you up to date with more on the 2021 Autumn Budget as it becomes available, but if you have any queries just get in touch with me or your usual Haines Watts contact.