As we gear up for this month’s Autumn Budget, our Head of Tax, Cathy Revis, has been dismissing the rumours and diving deep into the facts about what’s really coming. In the fifth and final no-nonsense tax talk, Cathy is ready to “get off the fence” and share her insights!
Shrinking economy
The Institute for Fiscal Studies (IFS) predicts that UK debt could reach 110% of GDP by 2025, and the economy may be 5% smaller by 2024/25 than initially expected. If these forecasts are accurate, tax revenues could fall £100 billion short, leaving a large gap in public finances that will need to be addressed.
However, despite these financial pressures, the IFS warns that now is not the right time to raise taxes, although arguing that substantial rises will be needed in the coming years.
Cathy’s predictions
In Cathy’s view, Labour will raise taxes, and it’s unlikely that these increases will be limited to the very wealthy. After reducing the disposable income of taxpayers, Cathy wonders, will Keir Starmer stop accepting donations of designer clothes and glasses?
Cathy’s top 10 predictions are:
- CGT rate increase to 25%-30%, but not until 6 April
- Tweaks to BADR and a longer term reform
- More IHT for non-doms and offshore trusts
- Extend IHT to all UK residents, not just those domiciled
- Reduce or remove some smaller IHT gift reliefs
- Tighten APR and BPR exemptions from IHT, possibly after a consultation
- Introduce a higher IHT rate for estates valued at £10m+
- Consultation on making pensions subject to IHT
- Reduce pension tax relief to 30% from 6 April
- Consultation on reforming the council tax system to one based on property value
Still unsure how the October Budget changes may impact your taxes? Contact Cathy Revis for more detailed business guidance on 02380 332 733 or email cathyrevis@fiandertovell.co.uk.