The Autumn Budget will be "tricky" for Chancellor Philip Hammond as he faces pressure from a number of sectors, says accounting, tax and advisory practice Blick Rothenberg.
Ahead of the Budget, which is set to take place 22 November 2017, Blick Rothenberg has made some predictions.
Director Robert Pullen stated that Chancellor Philip Hammond should aim for simplification with regards to tax as it would give taxpayers "certainty" and restore some trust in the tax system, whilst making the UK more attractive to international movers.
With regards to National Insurance Contibutions (NIC), Mr Pullen suggested that Mr Hammond align the NIC zero percent band with the personal allowance, giving lower paid workers a small NIC saving whilst simplifying the system.
This could be the approach if the Chancellor wishes to implement his “Age Tax”, Mr Pullen said, by only increasing the zero percent band for those workers under the age of 40. It would need to be funded, possibly by an increase in the two percent NIC above £45,000, for example, to three percent for individuals over 40, he added, although it would be for him another example of a "convoluted" tax system.
Mr Pullen also considers that Mr Hammond should seek to boost the housing supply not through SDLT increases, but by introducing lower tax rates for brownfield landowners who release land for development of new housing.
Helena Kanczula, corporate tax director, added that the Chancellor should use the opportunity to introduce an SDLT “holiday” for first time buyers and those who are downsizing. Additionally, an SDLT installment payment regime could be introduced for properties over a certain value, as the upfront cost of SDLT can be "prohibitive". She added that mortgage interest relief should be reintroduced for first time buyers.
Partner Caroline Le Jeune deems it likely that the Chancellor will announce an increase in Capital Gains Tax (CGT) to 40 percent with effect from 6 April 2018 to encourage a windfall in CGT as people get transactions done before the tax year end.
The Chancellor is under pressure to increase public sector pay and allocate resources to the NHS, according to Rebecca Goldring, manager at Blick Rothenberg.
She believes that Mr Hammond will have to either raise the level of debt or raise/change taxes. For the latter, Ms Goldring said, he could introduce changes in certain areas such as Inheritance Tax and restrictions of availability of Agricultural Property Relief or Business Property Relief.
Partner Gary Gardner noted that there is a "formidable" array of measures in HMRC’s arsenal against tax evasion and "it is hoped the Chancellor will not introduce any further initiatives".
He stated that businesses need time to come to terms with these "new and sometimes onerous" measures and the Government needs to recognise the importance of standing back and properly assessing the effectiveness of these provisions before introducing further legislation.
Finally, partner Nimesh Shah predicts that the Chancellor will abolish the marriage allowance and replace it with an enhanced personal allowance for basic rate taxpayers and will delay the effective date of Making Tax Digital to April 2021 for all taxes to provide for greater time for HMRC and taxpayers to prepare.
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