After positive news on Government borrowing in July together with better tax receipts both above OBR predictions , the Chancellor may just have some good news for Parliament and taxpayers. However, the CJRS furlough scheme is only scheduled to stop at the end of September so despite the news headlines of labour shortages in certain sectors, unemployment may spike in October affecting Government spending on benefits and perhaps even growth forecasts despite the impressive increases this year.
With the increase in Government debt that the Chancellor has built up during the pandemic, the current BoE base rate means that the cost of servicing that debt is very low by historic standards and the Chancellor will want it to stay that way. If high inflation persists into , it seems likely that the BoE will have to act and increase interest rates at some point during the year.
The Chancellor has already said that Government finances have to return to balance at some point and the deficit be reduced to more sustainable levels. Take the 'reform' of basis periods for the self-employed. This is being badged as a simplification measure to help sole-traders and partnerships with the move to Making Tax Digital quarterly reporting from April but, in practice, it will at the very least accelerate revenue for the Exchequer for and the next 5 years.
Better still, the vast majority of taxpayers would not be affected. Freezing other allowances and thresholds at a time of rising inflation could be a nice little earner for the Chancellor over the next few years.
Increasing capital gains tax, possibly by aligning with income tax rates, would be a more visible tax rise but may not collect a great deal relative to the total tax take. However, in the light of the NIC increase, perhaps making technical changes that cut back CGT reliefs is a more likely option.
After the end of the furlough scheme , job creation and skills shortages has already been partially addressed by the announcement of more job search support for individuals and short extensions of the Kickstart scheme and apprenticeship grant scheme. There may be successor schemes for to replace these.
The Government has also announced special work visa schemes for EU workers to reduce skills gaps in the short term — for example, a special scheme to increase the number of HGV drivers. It is possible that here will be more sector-based schemes announced in the Budget — similar to the funding for 2, AI scholarships announced by the Chancellor at the Conservative party conference.
From an individual tax perspective, there was little change following the 1. As a part of this, following consultation one major change is to basis periods, so that business profits would be charged to income tax as they arise from month to month, rather than the current rules based on accounting periods. There is a relaxation in the reporting and payment deadline for capital gains on UK residential property from 30 to 60 days.
In the run up to the Budget there was speculation that there could be reform of the taxation of work, taxation of wealth or capital gains, or additional taxes to help the change to a greener economy.
There was no mention of these areas, nor any commentary on future international corporate tax changes to reflect the OECD proposals for a minimum 15 percent global tax rate and a reallocation of profit to customer jurisdictions. The Government announced last week that the digital sales tax would be repealed once these international rules came into force. In summary, with significant tax raising measures previously announced including the corporation tax increase to 25 percent from 1 April , the inflation impact of freezing of personal allowances and rate bands, and the new health and social care increases, there was little need for the Chancellor to raise additional taxes in this budget.
This was a holding budget enabling the Chancellor to wait for the uncertainties in the economy to be resolved, before returning to a tax cutting budget in the run up to the next general election.
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You will not continue to receive KPMG subscriptions until you accept the changes. Close Hi! By entering your details, you acknowledge that your information will be used in accordance with our privacy policy. You can unsubscribe at any time. Searching Money Mentor. See all results. Article What does the Autumn Budget mean for you? In this article, we outline: What was in the Budget? Five things that could affect your finances What had been confirmed before the Budget speech?
But here are the five things that could change the amount of money you have in your pocket. These measures will be brought in by 1 December and will help around two million people. Fuel duty freeze Tax on petrol and diesel has been frozen for the past 11 years and some people thought it might be time for that to change.
Changes to cost of alcohol The alcohol duty system will be made fairer and more straightforward. Flying within the UK will get cheaper but long-haul flights will become pricier There was good news in the Budget for people who fly between airports in England, Scotland, Wales and Northern Ireland. Find out: How to save money by going green 5. Pensions could get more expensive There is currently a 0.
However, depending on the outcome of that consultation, the cost of your pension could increase. Here are some changes that we already knew about: National insurance contributions will increase by 1.
We explain more here Dividend tax will increase by 1. The triple-lock has been in place since and was designed to ensure that the state pension will rise with the highest of either: Inflation Earnings 2. Find out more: How to save money by going green Sign up to our newsletter Receive regular articles and guides from our experts to help you make smarter financial decisions.
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