As we approach the Chancellor's Autumn Statement, there is much speculation about what may be announced. With gloom still hanging over the UK economy, will there be anything positive to say?
What will the Chancellor announce in the Autumn Statement 2023?
Let's face it, the Chancellor has argued for ages that the public finances won't allow for any tax cuts. And he's refusing to inject any new money into the economy as he's trying his best to bring down inflation.
In the face of a looming General Election next year, what can he offer? I think it's going to be more targeted for the Autumn Statement with a few crowd-pleasers thrown in for the Spring Budget.
Here are my thoughts on what will be included:
Income Tax
Although many in the Government and his wider party are crying out for the tax burden to be reduced, I feel that he is very unlikely to reduce Income Tax. With frozen personal allowances and higher rate thresholds, the headline tax rate for middle earners is simply going to go up over time. Maybe he's going to unfreeze those allowances rather than cut the basic rate of tax?
Inheritance Tax
The current threshold for inheritance tax is £325,000, and anything above this is taxed at 40%. There have been calls for this threshold to be increased, and it is possible that the Chancellor may announce some changes in this area. However, it has been revealed that the Government is considering removing IHT altogether, and that would certainly grab some headlines. He may save that for the Spring Budget or it could even become a manifesto promise for the General Election.
Stamp Duty
Stamp Duty Land Tax is a bit of a cash cow for the Treasury with receipts growing as the property prices boom. It is an unpopular 'stealth tax' though so there could be some changes here. As a disincentive to downsizing for older homeowners, and even a drag on social mobility for employees, changes in SDLT would be popular.
The Triple Lock
Oh, the ever-contentious triple lock! This year's bumper 10.1% hike added £11 billion to state spending in the 2023-24 year and another 8.5% hike next April will add £2 billion more. It looks like the Government may have to 'water down' the triple lock a little and they're going to get a lot of flack for it. I think reform is coming, but I wonder if it will be announced after the next General Election as it would certainly be a vote loser for the Conservatives.
Pensions Lifetime Allowance
It was surprisingly abolished in the last Spring Budget, but I feel there may need for clarification of the rules before the start of the next tax year. There are a lot of grey areas here and they're causing a lot of uncertainty for many.
Other areas of interest
The Prime Minister announced what could be called a 'watering down' of the UK's Net Zero efforts with extensions to deadlines so this could help the economy. New licenses for oil and gas drilling which will be allowed will bring more tax into Treasury coffers over the next few years.
The Government is going big on AI after hosting a forum at Bletchley Park recently so it's no surprise that the Automated Vehicle Bill will set a framework for self-driving cars. We've had automated delivery robots in places like Milton Keynes for years, so this could be a natural progression. Tax breaks for leading-edge companies working in technology will certainly see an influx in investment.
Surprisingly vapes are going to be further taxed and restricted. I find it a bit weird that they're doing this as they form part of the NHS Stop Smoking programme, but maybe the Treasury feels they're missing out and could be making more from them? We'll have to wait and see on that one because it was only recently announced in the King's Speech.
So, there may be a little bit of wiggle room for the Chancellor in the 2023 Autumn Statement, but with the economy seemingly stalled due to higher interest rates, I don't think there'll be anything headline-grabbing. He'll save that for the Spring Budget because of next year's General Election.
Still ... fingers crossed ... maybe there'll be a little something in there to please a few of us, but with his relentless drive to bring down inflation, I won't be holding my breath.
Until next time ...
ROGER EDDOWES Business Godparent
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Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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