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. Moving forward, one annual budget will now be the norm. In place of the usual Spring and Autumn statements.
Labour have already promised not to increase headline taxes including National Insurance Contributions. They have made it clear that they believe taxes on working people are too high and need to be lowered as soon as its financially viable.
This reduction in taxes is likely to include self-employed and employee National Insurance Contributions. Whilst, there is still conversation over the contributions of employer’s, a decision to not lower employers’ National Insurance at the same time would be unusual considering Labour’s aim to grow the economy and support businesses.
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:
- An end to offshore trusts to avoid inheritance Tax.
- Advancements to the non-domicile reform to do away with the tax advantages of being a non-domiciled UK taxpayer.
- An increase in the Stamp Duty Land Tax surcharge for non-residents of 1%, alongside a decrease in the Stamp Duty exemption for first time buyers to £300,000.
- A commitment to keeping the personal tax bands as they are until 2028.
- Although Labour has assured us that Income, VAT and Corporation tax will stay the same, they may not be able to keep this promise due to the nation’s current financial state.
- In the past the Chancellor has shown her interest in reducing tax relief for pension contributions to a flat 33% in order to provide a boost to basic rate tax payer and a savings cut for the high-rate earners. Is this something we can expect in the first budget?
The next 5 years under Labour is likely to come with change but our industry has shown itself to be extremely adaptable. Focused’s umbrella company will be on hand to support contractors the whole way.
Related article: What will the future look like for contractors under Labour?
Labour Chancellor Rachel Reeves wasted no time addressing the state of the nation’s finances in her statement to the House of Commons on 29th July. Alongside a comprehensive review of government expenditures, the Labour government also outlined plans to avoid future budgetary surprises.