Earlier in the year there was speculation that the Chancellor may not hold an Autumn Budget this year. We now know that will not be the case with the announcement last month that the Autumn Budget will be held on 27 October 2021, so what can we expect?
One common thread since the start of the year and referenced in each key speech made by the Chancellor since the Spring Budget is that the government is focused on looking to balance the nation’s books. With the already announced Health and Social Care Levy which in effect gives 1.25% tax increasing on earned income and dividends, what else might the Chancellor announce and will we see further tax increases?
• The latest consultation on the residential property developer tax that would seek to make an increased tax charge on the profits of residential property development companies is currently open until 15th October. We can expect to get some indication of the likely tax rates and what level of profits this may apply to.
• In the Spring Budget a consultation into R&D was announced and we could see announcements in the Chancellor’s statement to make the relief more targeted to encourage growth in specific sectors.
• We already know that in 2023 the main rate of corporation tax will increase, but could we see the Chancellor look to increase other taxes;
• Although not an increase in the overall tax take changing the administration of the tax system to accelerate when taxes are collected could be seen as a welcome step and a way to address the perceived tax gap. One of the reasons for the introduction of MTD was seen by many as a first step to this. With the recent delay in implementation to income tax, we may see changes to how it will be implemented.
Whilst there are many unknowns, and with the Prime Minister this weekend not ruling out further tax increases, we will be keeping on top of the changes as they are announced and you can follow our live coverage on the day. As usual we will also be giving our immediate feedback and implications of the announcements the day after the Chancellor’s statement via our update webinar and will be providing further insight in the days afterwards as details are released and the implications of any changes become clearer.
By Mark Tibbert, Partner