Looking Ahead : Autumn Budget Predictions

The new Labour government has indicated that the upcoming Budget will involve significant tax changes, although major tax rates will remain unchanged. Instead, numerous other measures are expected to address a £22bn deficit.

• The Autumn Budget 2024 is expected to include significant tax changes and measures to raise government revenues.
• We anticipate that the small print will include information regarding employment status, day one rights, and zero-hours contracts for employees. However, we have been informed that this is likely to lead to consultations and plans without any immediate changes in the next couple of years.
  
  
• Anticipated changes include adjustments to Inheritance Tax, Capital Gains Tax, and VAT exemptions. Increases to the rates of income tax, national insurance and VAT have already been ruled out.
  
  
• One area of speculation is whether there will be a change to rules on pension tax relief and introduce a flat rate. In addition, they could look to restrict people’s entitlement to tax-free cash when they access their pension pot. In addition, most people can take up to 25% of their fund tax-free from the age of 55, which is due to rise to 57 in 2028.
  
  
• Pledges to freeze corporation tax at 25% and retain full expensing capital allowances should be confirmed.
  
  
• The Chancellor has already committed to freezing income tax and other thresholds until 2028 so extending that freeze a year or two could be an attractive option.
  
  
• Although council tax was not mentioned in the Labour manifesto, it did make a public commitment not to change council tax bands. However, a revaluation of properties has not happened since 1991.
  
  
• Consumer expenditure has held up well despite recent monetary tightening.
  
  
• The Bank of England is expected to continue to cut interest rates this year and throughout next year, although it currently remains at 5%.

• No Budget is complete without anti-avoidance measures, but the definition of a ‘loophole’ or avoidance tends to be flexible depending on the political colour of the government and its finances at the time.

If you would like to discuss these points in more detail, please do not hesitate to contact our team on 01244 564 564. We will provide an update on the Autumn Budget following the chancellor's full statement.