Autumn Statement 2023

Our Autumn Statement predictions

There have been a few hints as to what might be delivered in the Autumn Statement on the 22^nd November, but we asked our experts from Haines Watts offices across the UK to provide their predictions and thoughts on the upcoming budget announcement from Chancellor Jeremy Hunt.

Updated 20th November: It seems Prime Minister Rishi Sunak has since hinted that tax cuts may be coming due to the success in reducing inflation - tune in to our 'Owning it.' Autumn Statement Special podcast episode to find out about the announcements and what they may mean for you and your business.

Ian Haynes

Tax Director

I think that the Chancellor is trying to steer a ship the size of the Titanic with a teaspoon just now. The socio-economic climate remains depressed and growth in the UK remains largely stagnant, so any moves made by the Chancellor risk not being enough to get the UK back on course, or may tip this delicate balance even further awry. The public want to see more purchasing power for their pound, whether this is in form of tax savings in their wages, at the petrol pumps or at the supermarket, so not an easy fix for Mr Hunt.

If Jeremy’s days are numbered at no.11, he may have some surprises lined up for this Autumn Statement. Tax cuts were ruled out, but he could backtrack here to gain popular approval. The mooted changes to capital gains tax and pension reliefs in the past are still both valid alternate routes to claw back tax revenues, so might also come back to the table to combat cuts elsewhere. He could extend reliefs on capital spending for businesses; a positive move that will promote growth in the UK. He could offer landlords suffering under soaring Buy To Let interest rates some extra help, but this would probably be linked to base rate movement, so only a limited reprieve. IHT could face the axe, or simplification with a hefty upper limit to catch only the wealthier individuals, while everyone else pays nothing, but this could have capital gains tax implications for beneficiaries of estates.

I suspect any significant tax savings will be held back until the spring 2024 Budget, in order to warm up the UK population in advance of a general election, so the tax outlook for Autumn could be pretty chilly.

David Fort

Managing Director

There’s a lot of talk and pressure to reduce the tax burden which has risen sharply but it may be too early to look at cutting taxes. What with inflation and interest rates as they are I’m expecting this statement to be quite political and less dramatic than the Spring Budget due in March.

My clients are struggling with corporation tax, the minimum wage and national insurance increases, so from a business point of view it’s having a very negative impact on clients and business confidence.

I’ve been asked if there’s a chance the capital allowances could increase in order to encourage business, which we saw a couple of years ago but it’s been watered down over time and it is something we would support and like to see. There’s been talk about cutting or abolishing Inheritance tax which sounds good but it could be a political move, it could possibly be seen as a tax on the rich which may go against votes in the next election.

He may look to do something on stamp duty for first time buyers, and maybe something on the pension triple lock with that becoming more expensive to support. It might be one budget too soon to consider a change to the higher rate tax bracket.

They seem to be back tracking on R&D and clamping down on the rules so it doesn’t seem to be as generous as it has been in the past for helping businesses. There has been an increase in the use of Employee Ownership Trusts which are a tax break and so is good for business but therefore costs the government. I hope that he doesn’t touch capital gains tax for businesses which would impact those looking at buying and selling which helps the economy.

There’s a lack of long-term vision, which impacts business investment and confidence, anything they do won’t likely happen too quickly so they could signpost dates in the next couple of years and try to garner favour with voters. It’s getting more expensive to run a business and employ people and people are feeling the squeeze so anything they can do to help ease that pressure would be good from mine and my clients’ perspective.

Direct taxes are unlikely to increase, but it’s unlikely there will be a corresponding decrease. Frozen bands and allowances (e.g. income tax, inheritance tax etc.) will create fiscal drag for individuals and businesses respectively and expectations point towards an increase in indirect taxes, often referred to as "stealth" taxes.

Amilios Costa – Managing Partner, Finchley

Shazin Tayub

Director

Whilst I am expecting relatively low-key announcements on tax measures, it was announced this morning that the inflation rate has slowed to 4.6% and the government has met its pledge to half inflation by the end of this year. This coupled with the fact that Jeremy Hunt believes that the fiscal discipline is working and we are heading into election year, I think there may be some surprise announcements on business taxes to support competitiveness and growth in the UK economy. There is bad news for individuals as Jeremy Hunt has said that if there is any money then he would direct it to businesses.

Having said this, I am not expecting that there will be much headroom as interest rates are still stubbornly high and this means there is unlikely to be much fiscal headroom.

I agree with the suggestion that the vote-pleasing tax cuts will be deferred to the spring budget and the Autumn Statement would be focussed on stimulating business growth.

I predict that it will be the tax equivalent of beige. Entrepreneurial behaviour will be encouraged but without the necessary incentives that must accompany it. I also think they will have a keen eye on the next General Election, so there will be plenty of references to ‘wins’ for the average household based on low impact tax policies that may have already been put in place but are worthwhile re-announcing

Martin Gurney – Partner, Swindon