The government faces some tough decisions as it prepares to make its announcement in 2024 about the UK Autumn Budget, with a £22 billion budget shortfall that must be addressed. Based on the talk of the industry, and forecasts by experts here is what I think are key areas to keep an eye out for.
1. CGT (Capital Gains Tax) reforms
CGT rates are likely to be upped by the government, and we could see them inch closer towards income tax. This would lift the existing top rate of 20% to a painful 45%, hitting investors and business owners planning disposals most. Review of Business Asset Disposal Relief (formerly Entrepreneurs’ Relief), however there is fear over tightening the criteria further and a decrease in lifetime limits
2. The employer sides of the National Insurance Contributions (NICs).
With the Chancellor under political pressure not to increase personal taxes and borrowing he may therefore have little choice other than to raise Employer NICs, possibly by 1%: generating up to £9 billion of revenue. Side-stepping individual taxpayers, a politically safer move though businesses would likely spread some of these costs to employees in the July 1 wage growth.
3. Overhaul of Inheritance Tax (IHT)
Major overhaul of inheritance tax Raising the IHT rate beyond its current 40 per cent is one possibility, but it could also involve reducing that tax-free threshold from £325,000. Labour might also tighten up current reliefs such as Business Property Relief (BPR) and Agricultural Property Relief (APR), which would have implications for business owners, rodeo companies and family-run farms.
4. Exit Tax - A Possibility?
While unconfirmed, reports suggest a so-called “exit tax” for rich people to pay when they leave the country. This would apply to unrealised gains on emigration, a model seen in the US and Canada. This is more problematic though, as it would spike revenue once off at the risk of massive capital flight even before implementation.
5. Pension Reforms
Pension taxation will be different A form of that reform could include slashing the tax-free lump sum – currently pegged at £268,275 – to say, £100,000. On top of that, there could be a National Insurance charge on basic rate taxpayers taking private pensions too… an extra layer in the grey tsunami tax hike. And though these changes are targeted at boosting Treasury revenues, they look certain to be unpopular with pensioners.
6. Non-Dom Taxation
The move to abolish non-dom status by 2025 is one of the most keenly awaited. This will ensure non-UK domiciled individuals are taxed on their worldwide assets (reporting basis) after 10 years of being resident, by taking them into the UK tax net. Toppling the regime could cause rich people to leave, making it a less attractive place for high-net-worth individuals.
7. Green Incentives and Fuel Duty
This could see the government scrap a freeze on fuel duty for the first time in over 10 years, with it raising prices by as much at 5p per liter. This one will be probably dressed as environmentally friendly to encourage switching for EVs, similarly the other green economy incentives rumor’s
Conclusion
These are incredibly broad predictions, making it even more critical for businesses and consumers in Putney, Harley Street, and Battersea to stay proactive. We are keeping an eye on UK Autumn Budget 2024 insights specifically for Southwest London, Central London, and Wandsworth Borough, ensuring we can guide you through these impending rule modifications.
If you’re in Southwest London or Central London and would like further ideas or wish to discuss how these proposed reforms may impact your financial planning, please contact us at Lanop Business & Tax Advisors. We can provide insights tailored to Wandsworth Borough and Putney for a deeper understanding of how the 2024 Autumn Budget might affect you locally.
