The next UK Budget is due to take place this autumn, in October or November. And while the Treasury hasn’t yet set a date, there’s plenty of speculation about what the Chancellor, Rishi Sunak, could announce. It’s also possible that big public spending decisions might be delayed because of the ongoing Covid-19 crisis.

To keep you informed, here’s our roundup of the rumours about what the forthcoming Autumn Budget might include.

Will there be tax rises?

There’s a lot of talk in the media and among economists about whether taxes will increase to help pay for the huge coronavirus bill.

The Guardian reported earlier this month that the Government response to the pandemic is estimated to have cost £210bn for the first six months of the crisis. That figure includes extra NHS funding, business grants and emergency job support.

And given the fact the UK is now in a recession and more than 700,000 jobs have been lost since March, the Government faces difficult decisions as it attempts to put the economy on a more sustainable footing.

Could the Autumn Budget be delayed because of Covid-19?

It’s possible the Budget could be postponed until spring 2021 because of fears over a large second wave of the virus in the UK.

However, if there is a delay, it’s expected the Chancellor will present a ‘mini-spending review’ before the end of autumn this year.

Capital gains tax

It’s been reported that Mr Sunak is considering reforms to capital gains tax (CGT), which could see CGT being paid at the same rate as income tax. If you’re a basic-rate taxpayer, this move could mean the tax due on profits from selling assets would double from 10 to 20%. And if you’re a higher rate taxpayer, the rate could rise to 40%.

Corporation tax

There are rumours that an increase in corporation tax is under consideration, which could see it rise from 19% to 24%.

We don’t yet know whether this would apply to all companies or whether they would return to having a lower rate for trading companies and a higher rate for investment companies. There’s also a big question mark over whether such a move would be sensible at this time due to the number of businesses already struggling to survive.

Inheritance tax

Inheritance tax (IHT) could also see changes and we’ll be keeping a close eye on this. The Office of Tax Simplification previously made recommendations that haven’t yet been enacted, so we may see some movement in this area.

Pensions

The triple lock on state pensions – which guarantees these pensions increase at least as much as wages or inflation – is said to also be at risk. And Mr Sunak may decide to make cuts to pension tax relief, too.

Be prepared

If you’re planning to sell assets this tax year, it would be sensible to do this before the Budget. But don’t go selling everything you own just to try to stay in the current rates.

Remember, the Budget hasn’t yet taken place, so we don’t know for sure what it will contain – and when it will happen.

However, being prepared is always wise, especially in these uncertain times.

Tax planning advice

Tax planning can help to keep your finances in good shape, both for you and your family.

The team at Churchill Taxation have the training and experience to provide you with sound tax advice to help you plan for a financially secure future.

We can help you with:

  • Self-assessment tax returns
  • Capital gains tax
  • Offshore tax
  • Inheritance tax
  • Business tax
  • Trust and estate tax
  • HMRC tax enquiries and investigations
  • Expert witness service

Call us today on 07813 434195 or send an email to stephanie.churchill@churchilltaxation.co.uk

Steph Churchill

Stephanie Churchill

Managing director & co-owner of Churchill Taxation