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Anticipating Labour’s First Budget: what to expect

With only weeks to go until the Autumn Statement on 30th October, the industry is keeping an eye out for any hints about what measures will be discussed.

One thing that was discussed at the Labour Party Conference which took place in September by both the Prime Minister and Chancellor was their firm stance on not going back on their decision to abolish the Winter Fuel Allowance which now only supports the lowest income pensioners.

The emphasis being on the reported £22 billion “black hole” in public finances inherited from the previous administration which remains an issue for the Labour government pre-empting some difficult decisions to be made for taxation and public spend.

What can we expect?

  • A re-evaluation regarding Capital Gains Tax (CGT). There is speculation for potential change to CGT including aligning CGT with Income Tax rates, abolishing the current £3,000 annual exemption and taxing these gains upon death.
  • In a bid to enhance capital expenditure there is the possibility that the Chancellor may consider revising fiscal borrowing rules.
  • Discussion around the plan to bring forward the non-domicile taxation rules and if the initial predicted income would be as high as expected.

Our predictions

We should expect more hints to be dropped over the coming weeks and possibly some early announcements. Currently however we think the Autumn Statement will focus on:

  • An increase in the CGT rate.
  • A reduction in pension tax relief, possibly seeing the introduction of a flat rate tax or an altering of the tax-free withdrawal limit.
  • A rise in Fuel Duty tax.
  • A reduction of current exemptions to Inheritance tax
  • A decrease in the Stamp Duty exemption for first time buyers

Watch this space for our reaction to the Autumn Statement where we’ll share with you the implications for tax-payers, contractors and all those involved in the labour supply industry.

Related article: Our predictions for the first Labour Budget

The Chancellor of the Exchequer has announced that her first Budget will be on the 30th October and it will be the only one of the year, in place of the usual Spring and Autumn statements. In her recent statement, the Chancellor already hinted at some things that may be included in the upcoming budget alongside some others we can predict:

Our predictions for the first Labour Budget >