What to expect from The Budget

With the new government’s first Budget fast approaching there’s been much speculation about what might be included in the statement. Kier Starmer has already hinted that there are likely to be some tough measures included and there are many theories about what this could mean. Whilst we’re unlikely to have a detailed picture of everything Rachel Reeves’ budget will include we can begin to prepare by taking a look at the hints on what may be included 30^th October.

If you’d like to learn more about how the Budget might impact you and your business, we’ll be holding a short breakfast briefing on Wednesday 27th November at Trowbridge Rugby Club. We’re pleased to be welcoming guest speaker, Chartered Financial Planner – Simon Martin, who will help you to understand how to protect your financial future in light of changes announced in the Budget. Doors open at 8:30am with the briefing scheduled to begin at 9am – the event is completely free to attend and includes a light breakfast and selection of drinks. Simply register with your name and email address and we’ll see you there!

Alternatively, please contact Emma or Cassie on 01373 510020 or by email at marketing@goodingaccounts.co.uk to book your space.

What we already know

During their election campaign the Labour Party committed to:

• Changes to private school taxation – including adding VAT to private school fees and charging schools business rates.
• Increasing the stamp duty charged on residential property for purchases by non-UK residents.
• Taxation changes for UK residents who’s permanent home is outside of the UK

The Labour Party also ruled out:

• Increasing taxes for ‘working people’ Whilst there is no clear definition as to who will fall within this category, in reality it is likely that headline rates of income tax, VAT and National Insurance contributions will not change.
• Increases to the rate of Corporation Tax beyond 25%

What can we speculate on?

At the end of August the Prime Minster stated that things were likely to get worse before they get better due to a ‘black hole’ in the country’s finances. He also mentioned that those with the ‘broadest shoulders’ would be most affected by the changes, however again there’s little clarity on which businesses and individuals may fall into this group. The speculation is based on the acknowledgement that the Government will likely need to increase taxes to meet their commitment to improving the country’s financial situation.

Wealth was conspicuously absent from Labour’s election manifesto, so there has been much speculation that changes to Capital Gains Tax and Inheritance Tax may well be announced on 30^th October including:

• Changes to Inheritance tax relief
• Changes to exemptions on Capital Gains Tax and higher taxes
• Increased taxes on investment income
• Tax-free allowances on pensions adjusted
• Changes to pensions tax relief
• Business Assets Disposal relief changes

Good News for small business owners – Business Assets Disposal relief

The good news is that it’s thought that the government will be unlikely to target those with gains of less than £1 million as they continue to encourage the growth of small businesses. The lower rate Capital Gains Tax of 10% is widely expected to remain for the sale of business assets where the gain is less than £1m on the sale of business assets.

How might Capital Gains Tax change?

There has been some discussion about whether Capital Gains Tax can be changed mid-year, whilst some believe this may affect the Chancellor’s decision it’s important to remember that it has happened before when a new Conservative government made changes following their June 2010 election victory. There is a possibility that the Government will defer the change until April 2025, so if the chancellor wants to raise revenue in a hurry waiting until April 2025 could deliver more in the short term.

Will there be a ‘Wealth Tax?’

The promise of tax increase not impacting ‘working people’ has led to the speculation that the Government might introduce a separate ‘Wealth Tax.’ There has been no clear indication that this will form part of the budget, but with increased media and union discussion the possibility cannot be ignored.

A Wealth Tax could be tricky to define and administrate, with questions around how assets would be valued and the liquidity to even pay such a tax it’s possible such tax will be left out of this budget.

More likely would be higher taxes on capital in the form of inheritance taxation and Capital Gains Tax. The Government may also be considering changes to tax on residential property through revisions to council tax.

How can I prepare for the changes?

Here at Gooding Accounts we understand that uncertainty and speculation about any changes can be unnerving. It’s important to remember that whilst the budget represents a significant change the legislation, along with your personal circumstances are in constant change. Our expert team will be keeping up-to-date with what may change to ensure we’re equipped to help you manage your finances.

We’ll also be hosting a breakfast briefing on Wednesday November 27^th in partnership with Heritage Financial Planning to discuss the budget and how the changes might impact your business. The briefing is free to attend and includes a light breakfast and a selection of drinks. If you’d like to join us at Trowbridge Rugby club from 7:30am simply register your details online today.

Alternatively, please contact Emma or Cassie on 01373 510020 or by email at marketing@goodingaccounts.co.uk