17-Nov: What are they planning?

8th November 2022

With the Chancellor’s Autumn Statement scheduled for 17 November, a lot of Sunday papers today have pieces on what changes we might expect. With a predicted £50bn hole in the Country’s current annual finances (caused by growth downgrades and higher interest rates on debt repaymemts), any such changes are likely to be material. So what might change that affects typical business owners:

  1. Tax relief rules on pension contributions have been tipped as possibly too generous for a long time. So the banding or rate of this tax relief available could easily be reduced (eg tax relief capped at basic rate only for personal contributions).
  2. Dividends paid out by family companies have been a more tax efficient way of extracting profits than salaries for many years, as they are not liable to NIC. Dividend tax rates here have risen successively over recent years and could easily rise again.
  3. Capital gains tax rates have been lower than income tax rates for many years now. If you believe taxes should be bourn by those most able to pay, then you cannot really get a more targeted group than those who have just cashed in shares or property.
  4. More ‘fiscal drag’ on future tax allowances, rate bands and reliefs.

If any of these changes were to be introduced, they are unlikely to be retrospective; they would likely be introduced from, either, midnight that day or the next 6 April.  The Parliamentary calendar for 17 November has Jeremy Hunt scheduled for before the lunch recess, so businesses and individuals might want to have money set aside ready that day, to bring forward future plans, to take advantage of the afternoon window that may exist to make last minute pensions contributions and/or to pay dividends out of the family business. They may also wish to consider bed and breakfasting quoted shareholdings.

 

Should we treat the newspaper articles as genuine leaks or just newspaper froth – who knows, but why get prepared just in case?

Disclaimer - All information in this post was correct at time of writing.
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