Rishi Sunak is set to reveal his Autumn Budget tomorrow, but with a 1.25% National Insurance hike having already been announced – the biggest rise in personal taxes in two decades – it is unclear yet whether further belt tightening will be imposed.
The Chancellor is due to deliver his statement to Parliament from the Despatch Box on October 27, with the national debt now at its highest since 1963. In the past few weeks, the £20 a week Universal Credit lifeline has been revoked, furlough shut down and the National Insurance rise set to raise £12bn for social care and the NHS introduced. That is as well as our country facing a ‘cost of living’ crisis, energy shortages – and inflation set to top 4% by the end of the year.
Here is what we might expect from the Budget:
Despite it having been scheduled to publish in the autumn, Mr Sunak is not expected to reveal the full recommendations from the fundamental review of business rates. But analysts, including those from Deloitte, expect to see details of a move to three-year revaluations from the current five.
Despite freezing capital gains tax until 2026, many expect Mr Sunak to hike the levy from its current £12,300 rate.
It is expected that further measures to help businesses grow – such as March’s capital allowances super deduction – will be announced by the Chancellor this time around. According to BDO’s Autumn Budget predictions, it is possible there will be more sector-based schemes announced in the Budget like the funding for 2,000 AI scholarships unveiled at the Conservative Party conference.
The Government has already confirmed the state pension ‘triple lock’ will be suspended for a year due to a skewed increase in average earnings during Covid. The triple lock guarantees that the state pension will increase every year by inflation, average wage earnings growth, or 2.5% (whichever is highest).
Soaring energy prices are the biggest concern facing most households this winter – and are rapidly becoming one of the biggest problems the government needs to tackle too. With many families facing the choice between heating and eating after wholesale gas prices rose 250%, the Government may offer a lifeline.
If you have any concerns over how the proposed changes may affect you and your investments, please reach out to your financial planner.
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