4 Mins
Autumn Statement – predictions
This year’s Autumn Statement is scheduled for 22 November 2023. What can we expect from this statement and how might it affect you?
With the current issues facing the country and the economy and a general election due by December 2024, this will be an interesting Statement as it is unlikely the Chancellor be able to make many of the usual announcements we might expect in the year before an election.
Jeremy Hunt has already warned that tax cuts are “virtually impossible”. This does not mean there will be no changes to tax.
The most talked about potential change is again inheritance tax. In every poll run on taxes, inheritance tax is consistently the most unpopular. Over recent years, there have been many suggested changes to the inheritance tax regime but very few actual changes. One suggestion, supported by a number of MPs is that inheritance tax is abolished.
With the tax taken from Inheritance Tax rising each year, it seems unlikely a Government under such pressure could abolish this tax altogether. If changes are made, it is likely they will be small changes intended to simplify the system and increase the allowances. However, larger changes have not been ruled out.
In last year’s Autumn Statement, it was announced that the personal allowance and the 40% tax threshold will be fixed until 5 April 2028. There are some reports around that for this year’s Statement, there will be an increase to the threshold at which the 40% rate kicks in reversing the freeze of last year but this report seems at odds with the no-tax cuts
Over the last few years, there have been many predictions of radical change to Capital Gains Tax, but budgets have come and gone with only very minor changes to CGT so far. Does this mean it will be left alone or will this be the big surprise?
The tax reliefs around pensions had a major overhaul earlier this year so any further changes around pensions are likely to be small tweaks if they are mentioned at all. As a reminder, the changes announced earlier this year include the lifetime allowance charge ceasing and the limit to be completely abolished from April next year. The other major change was to increase the annual allowance for those contributing to a pension rising from £40,000 to £60,000 from April 2023.
For Scottish taxpayers, not all the announcements in the autumn statement will apply to Scottish taxpayers and there is likely to be a Scottish budget shortly after the autumn statement in early December.
We will be watching the autumn statement and Scottish budget carefully and will be analysing and keeping you up to date with all the changes and their potential impact.
Tax return deadline
The deadline to file personal tax returns is 31 January which is now less than 100 days away. If you are due to submit a tax return and it is not already in progress, this is your reminder. Would it not be nice to head into the winter months without the tax return on your list of things to do?
Many people in the UK are not required to submit a tax return but the number who do has greatly increased in the last year with the reduction in the dividend allowance and the increase in interest rates. If you think you might need to submit a tax return, get in touch.
Paying your tax
Did you know you may be able to pay your Self-Assessment tax liability through your PAYE tax code rather than as a one-off payment in January?
If you have employment income or pensions on which you pay tax through the PAYE system with tax collected monthly or weekly and paid directly to HMRC and you have additional sources of income on which tax is due, usually this additional tax would be due in January and possibly July each year.
If the additional tax is less than £3,000 and you submit your tax return by 30 December, you can elect for this additional tax to be collected with the tax through PAYE. This means it will be collected from you in 12 equal amounts with your other PAYE tax.
While this removes the need to make a payment in January or January and July, please note that it does mean more tax from your monthly source of income meaning less money in your account each month. When deciding which you would prefer, it’s important to think about the overall effect on your cash flow.
If you have a large amount due to HMRC and you are struggling to pay this by the due dates, you can approach HMRC for a time-to-pay arrangement.
If you are considering coding out a tax liability or would like help to arrange a time to pay, we are happy to discuss and assist.