fbpx

Autumn Budget Predictions

Resolve News / By

This week the Chancellor announced that this year’s Autumn Statement would take place on Wednesday 30thOctober and Sir Keir Starmer has warned that it’s going to be ‘painful.’ 

He stated, “We have no other choice given the situation we are in’. And that we need to accept ‘short-term pain for long-term good’.

What are the predictions for the Autumn Statement? 

The Chancellor Rachel Reeves will announce significant tax changes to try to plug the £22 billion black hole in the country’s finances. The likely candidates for changes are Inheritance Tax, Capital Gains Tax (CGT), pensions and VAT exemptions. 

Inheritance Tax 

  • This tax is paid on the value of someone’s estate after they die. 
  • The standard rate for inheritance tax is 40%. 
  • The speculation is that this might increase, or the thresholds could be lowered, meaning more people would be subject to the tax. 
  • Labour may even consider shortening the period before death during which gifts can be made without triggering inheritance tax.

Pensions

  • The Chancellor has previously campaigned to reduce the tax relief that higher earners get on their pension and may instead introduce a flat rate of 33%.
  • Currently, you get tax relief at your marginal rate of tax, so a flat rate of 33% would mean higher earners would get less relief. 
  • Another possible change could be the rules around pensions and inheritance tax. Currently, pensions are not counted as part of someone’s estate when they die and can therefore be passed on inheritance tax-free. It’s possible that this could be reviewed. 

Capital Gains Tax (CGT) 

  • You pay CGT when you sell an asset that has appreciated in value, such as stocks, shares, a second home, or valuable artwork. 
  • Currently, the first £3,000 of profits (or £1,500 for trusts) is tax-free. 
  • Some are predicting that this allowance could be scrapped entirely and that the tax could be extended to include other assets. 

Business Rates 

  • During the campaign, Labour pledged to overhaul the system to support small businesses. 
  • One potential reform could involve basing the rates on the value of the land, rather than the current estimated annual rental costs. 

Winter Fuel Payments 

  • The Chancellor has already confirmed that universal winter fuel payments will be slashed, starting from this year. The money will then only be available for those people who receive certain benefits. 
  • Households with someone over the state pension age receiving means-tested benefits including pension credit, universal credit and income support will still receive the cash. 
  • It will be worth £200 for eligible households, or £300 for eligible households with someone aged over 80. 

Fuel duty 

  • The Treasury has refused to rule out a rise in fuel duty, which could prove to be a shock to household finances. The levy hasn’t risen since 2011. 

As we mentioned, these are only predictions and we will have to wait and see what the Chancellor announces on the 30th October 2024. Labour continues to confirm that they will not make changes to National Insurance, Income Tax, Corporation Tax or VAT – taxes on typical workers. 

Scroll to Top