Tony Byrne.
Tony Byrne, MD of Wealth & Tax Management, looks into his crystal ball ahead of the Chancellor of the Exchequer’s statement later this month.
Published in association with
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TRYING to predict future tax changes from a Budget is notoriously difficult, although you often get clues from the various pre-Budget ‘leaks’.
It is not unusual though for Chancellors to spring surprises on us that were not flagged up in advance. So the truth is, anything could be announced in the Budget.
One thing is for sure… on October 30, Rachel Reeves will make history as the first female Chancellor of the Exchequer to introduce a Budget in the UK.
The Chancellor is reportedly considering several changes, including:
- Increasing revenue from Inheritance Tax and Capital Gains Tax.
- Maintaining plans for a 1% increase in public spending, which could result in budget cuts for some Whitehall departments.
- Resisting calls to abolish the two-child benefit cap.
- Revising the method for measuring debt to exclude the Bank of England.
- Allowing less tax relief on pension contributions.
Because Labour has stated in its election manifesto that they will not increase Income Tax, National Insurance and VAT for working people and nor will they increase Corporation Tax, that means they are likely to concentrate on IHT, CGT and pensions. Certainly, an alignment of CGT with Income Tax looks on the cards.
Tax relief on pension contributions could be set at, say, 30%, meaning higher rate and additional rate taxpayers would receive less tax relief and basic rate taxpayers would get more.
The Annual Allowance of £60,000 could also be reduced. It is unlikely that the tax-free cash lump sum will be taxed though it wouldn’t surprise me if the cap were reduced further from the current level of £268,275.
Of course, I may be completely wrong in my predictions of what may happen in the Budget but that would surprise me.
- For advice on preparing for the Budget, take advantage of a one-hour Discovery Meeting either at our offices or via a video conference call at our expense worth £270 to each of the first three readers who contact us before October 31. You know it makes sense. We offer a great cup of coffee too. Ring us on 01908 523740 or for free on 0800 980 4516 or email wealth@wealthandtax.co.uk and quote OCTOBER 2024 OFFER to book your free discovery meeting.
RISK WARNING The Financial Conduct Authority does not regulate tax planning or estate planning. The information contained within this article is for guidance only and does not constitute advice which should be sought before taking any action or inaction. All information is based on our current understanding of taxation, legislation, regulations and case law in the current tax year. Any levels and bases of relief from taxation are subject to change. Tax treatment is based on individual circumstances and may be subject to change in the future. This article is based on my own observations and opinions. They do not represent the company’s views.
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