In normal years, the Autumn Budget (formerly the Autumn Statement) is released in November. However, with less than 6 months left on the countdown to Brexit, this year is far from a normal year.
At the end of September, Chancellor Philip Hammond made it known that the Autumn Budget would be announced on 29 October which is also, unusually, a Monday—traditionally budgets are announced on a Wednesday. Since the Wednesday would have been Halloween, maybe the Chancellor brought the budget forward by two days to side-step a possible Budget horror show!
The Chancellor’s Twitter feed indicates that we can expect Hammond to balance the books. Apart from this there has been little concrete information about what the Budget might comprise. However, Hammond has given us a few clues:
At the recent Tory conference, the Chancellor said that Britain will enforce a new “digital service tax”, even if other countries fail to follow suit. Though, what this tax might look like is presently unclear.
Hammond called for a reform of the international tax system for an era where digital companies account for much of global business, with Britain leading the way. Business leaders have stated that such a tax could compromise the UK’s status as a good place for digital companies to do business.
One of Hammond’s main concerns will be finding the funds to fulfil Theresa May’s pledge to pump an extra £20 billion into the NHS by 2023. The prime minister herself admitted that this would require tax increases, but was vague as to which taxes would be hiked.
The end of the freeze on fuel duty
It’s probable that the eight year freeze on fuel duty will come to an end this year. Last month, the Chancellor said that the freeze on fuel duty has meant the Government has “foregone” £46 billion in revenue and, if the freeze continues, will miss out on £38 billion more.
Obviously, what will have the greatest bearing on the ultimate success of any changes to the budget is any Brexit deal. A good Brexit deal will boost growth and balance public finances without the need for major tax rises.
Here at Charters Private Wealth, we eagerly await the Chancellor’s Budget at the end of the month.
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