With the Budget coming on 30th October, speculation is increasing on what changes will be announced. The Chancellor and the Prime Minister have made comments to indicate that the Budget will bring “difficult decisions”.
The Chancellor reported shortly after taking office that there was a £22bn “black hole” in public spending inherited from the previous government. The BBC reported last week that their sources indicated that actually £40bn is needed to avoid real-terms cuts to departments.
There has also been much talk about driving growth in the UK economy, with the International Investment Summit recently aiming to attract investment to the UK.
Will Employers NI increase?
While Labour’s manifesto promised no increases in taxes to workers, the same promise wasn’t made to employers. Employers National Insurance (NI) is the element of national insurance paid by employers based on an employee’s gross pay. It is therefore a tax on employers that isn’t directly felt by employees.
The Prime Minister neatly sidestepped questions in an interview last week about whether the manifesto promise included employers NI. Chancellor Rachel Reeves also confirmed last week that the election pledge not to increase NI for working people related to the employee element rather than the employer element.
Therefore, it looks as though the government are considering this as an option to raise taxes.
What else could change?
By providing this information early, the government look to be preparing the road so that we all expect an increase. However, the actual increase may be less than we fear so that it doesn’t seem like such bad news when it comes to it.
Also, by having an easy headline tax increase to focus on, other welfare cuts and tax rises may not be as easily noticed.
Other areas that seem likely to receive attention in the Budget could include capital gains tax, inheritance tax, fuel duty, and pension taxation. non-domiciled tax status and possibly a gambling tax.
Once the Budget is announced we will keep you updated on the changes. If you have any concerns about how the Budget might affect you, please feel free to get in touch at any time and we will be happy to help you.
See: https://www.bbc.co.uk/news/articles/cj9jdgprv7ko
Chancellor Rachel Reeves spoke last week at a meeting of EU finance ministers as part of the government’s attempt to perform an economic reset with the EU. It was the first time a UK chancellor has attended such an event since the UK left the EU.
HM Revenue and Customs (HMRC) have announced the launch of a new interactive online tool and clearer guidance for those who are already self-employed and those considering it.