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Autumn Budget Predictions – What Do We Expect to See?

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As Chancellor Rachel Reeves gets ready to present the UK Autumn Budget on October 30, we’re likely to see changes in tax and government income plans. The Labour Government says these adjustments are meant to steady the country’s finances as debt grows and the costs of essential services increase.

While the specifics of the Autumn Budget will be revealed during the announcement, we’ve identified some areas of change expected, based on government pledges and forecasts. Staying informed about these points can help you better prepare for the upcoming changes.

Capital Gains Tax (CGT) – A major focus of the budget is likely to be Capital Gains Tax. Experts predict the Chancellor may raise the rates to align them more closely with Income Tax rates. This adjustment would primarily affect wealthier individuals with investments or property, aiming to increase revenue by taxing gains more heavily. As a result, those in higher income brackets may need to rethink their investment strategies to navigate potential increases in CGT.

Inheritance Tax (IHT) – Changes to the Inheritance Tax are also expected, with potential reductions in exemptions or adjustments to reliefs. These revisions would mainly target larger estates, encouraging wealthier households to contribute more in taxes. This approach aligns with Labour’s strategy of focusing tax increases on wealthier individuals while keeping income and corporate taxes stable for most people.

Employers National Insurance – Before the general election, an increase to National Insurance Contributions (NICs) wasn’t expected, as Labour had ruled it out in their manifesto. However, rumours suggest the Chancellor may raise employers’ NICs from 13.8% to 14.8%, potentially bringing in £8-9 billion for the Treasury. Although this increase doesn’t technically conflict with the manifesto (which pledged not to raise taxes on workers), experts, including the Office for Budget Responsibility (OBR), warn that higher employer NICs could lead to lower pay rises for employees or businesses passing on cost increases as increased prices for consumers.

Fuel Duty – There’s growing expectation that fuel duty may rise for the first time in 13 years, potentially adding costs for motorists and businesses and acting as an indirect tax for working people. The increase could also be interpreted as an incentive to shift toward electric vehicles by making traditional fuel more costly.

Pensions – There is considerable concern about the tax-free pension withdrawal threshold. Currently, savers who are 55 and over don’t incur any tax when they withdraw 25% of their pension pot, if it is up to the amount of £268,275. If rumours and predictions are true, the Treasury could drop this threshold to £100,000.

At Lifetime, we are keeping a close eye on the headlines and will be following the budget announcements closely. As experts in the financial management space, we know how such uncertainties can impact people’s lives.

We are here to guide and support you through these financial changes. If you have any questions or concerns regarding the anticipated updates, please don’t hesitate to reach out to a member of our team.

If you are an individual, you can talk to our coaches to then progress to speaking with an experienced and qualified financial adviser. Book a chat now!

If you are an employer or HR leader, our financial wellbeing benefit is an essential tool in your employee benefit offering, more so now than ever. Talk to us today and see how we can help look after the money concerns of your people. Get in touch with us now.

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