The Autumn Budget 2021 is next week, and the Government have been unveiling a number of plans for the United Kingdom in the future. Popular or not, they have an agenda and seem to be moving it forward at speed ...
I think there will be a different approach this autumn. Rishi Sunak often confounds expectations, so I do wonder if this budget will not be one to raise substantial additional revenues; rather, it will be a holding pattern as 2020 and 2021 have been so traumatic for many.
I am expecting the National Minimum Wage to increase as young people have been worst hit by the pandemic. The Chancellor could increase it to £9.42 per hour, an increase of more than 5% from its current £8.91.
And he will probably end the public sector pay freeze, which was introduced at the start of the pandemic when the economy was rapidly shrinking due to lockdowns. Over a million workers were affected, including teachers, police and even local council staff.
We may not see changes to things like Capital Gains Tax (CGT), but we could start seeing consultations coming out as the next general election is only a couple of years away, and the Government don't want to hit core Tory voters with anything solid right now. Losses of reliefs could add hundreds of thousands of CGT on business disposals and asset disposal; overall, although it would be a good money raiser for the Treasury.
Inheritance Tax changes may also be unlikely right now, though, like CGT, there is pressure to streamline the service. It is possible that the exemption of tax on lifetime gifts may be abolished.
So, it's worth thinking strategically right now about the assets you may currently have and what you're going to do with them in future:
- Assets such as property or shares can be difficult to dispose of quickly. Consider making gains through gifts or selling a family trust or investment company
- Should you sell assets that have substantially increased in value rather than holding on to them and possibly incurring higher tax rates?
- Any succession planning on your wealth may well benefit from a chat with your accountant or tax adviser now rather than later. Moving early can save you large amounts of tax, and you can still retain control over your assets and how they are used
Everyone seems to be talking about the green agenda right now, with the Government committing the country to net-zero carbon emissions by 2050. However, the Government's own review has yet to be published, so I will be surprised if there's anything major announced around this, although heat pumps and electric charging points are a hot topic.
And finally, Prime Minister Boris Johnson is eager to publish his levelling up agenda as a flagship Government policy for the next few years. There may be some announcements around that, but it's worth noting that some of the rail projects already proposed will cost in excess of £30 billion, so where is that money going to come from?
Rishi Sunak will stand at the dispatch box next week, and although I think this will be a pretty benign Autumn Budget 2021, he may well pull a few surprises out of his battered red suitcase.
If you feel inspired to find out more about anything I've said here, do call me on 01908 774320 or leave a comment below and I'll be in touch as soon as I can.