The 2018 Budget has been set for Monday 29 October. Not surprisingly, it’s a little earlier this year because of the Brexit negotiations and the UK needs to have its tax and spending plans in place before a final deal can happen.
Despite Theresa May’s optimistic conference speech (not forgetting ‘that’ dance to ABBA’s Dancing Queen!) promising ‘an end to austerity’. Phillip Hammond, however, seems to have other ideas, having indicated quite the opposite, despite improving public finances.
So, what can we expect…? That’s a very good question!
Somehow this Autumn budget announcement has never felt more important. Will it deliver for the people and give business groups some much needed re-assurance, and will it be a budget that optimistically gets the country ready for Brexit, whatever the outcome?
Alongside measures announced in the draft Finance Bill, we think the following areas might feature:
The NHS – The Chancellor had said a digital services tax or ‘Google tax’ is coming – with or without our European allies. This income could be re-directed into the NHS.
Inheritance tax (IHT) – The Office of Tax Simplification (OTS) was tasked with making IHT less complex, focusing especially on trusts, administrative issues and business and agricultural property reliefs. Calls for a complete overhaul in favour of a ‘lifetime receipts’, ‘property’ or ‘wealth tax’ seem unlikely from a Conservative government.
Stamp duty – After introducing new reliefs for first-time buyers, focus has shifted to ‘last time’ buyers, with calls to incentivise older homeowners to downsize. The Prime Minister has also indicated that an additional 1-3% duty could be levied on foreign property buyers to help control rising house prices and tackle homelessness.
Business – Business rates are due to increase next year, with business groups calling for action. The Chancellor’s conference speech outlined changes to the apprenticeship levy to help build training and skills for SMEs, and appeared to boost commitment to the business sector.
The environment – We are likely to see a dedicated plastics packaging tax. Initial reports indicated the costs would be borne by manufacturers rather than consumers. That being said there’s every possibility that this cost will be passed on to the consumer via the plastic bag levy rising from 5p to 10p and see it rolled out to all shops, not just firms with over 250 employees.
Facing pressures from all the political parties, not just his own, the one guarantee is that Phillip Hammond has an almighty balancing act to pull off.
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