The Chancellor has announced that the 2018 Budget will take place on Monday 29 October 2018, having given just half the usual 10 weeks’ notice.
The Autumn Budget which took place for the first time last year, having been moved from the traditional Spring date, was initially trailed to take place annually in November or December, as was the case for the Autumn Statement which it replaced.
The Chancellor has said that the Budget has been brought forward, owing to the final stages of the Brexit negotiations taking place in November. In publishing the Budget earlier, more time is also made available for the measures to be debated before The Commons rise for recess on 6 November.
So, we now know when it will take place but as for what might be announced, clues have been in short supply.
With fiscal uncertainty on the cards for the foreseeable future, the Chancellor is perhaps more restricted than he would like, and many are predicting a ‘soft budget’ as a result.
Whether this is to be the case or not, we are hopeful that the Budget may at least give businesses a more realistic overview of what the future will hold. Here, we briefly summarise the few rumours that have been doing the rounds so far…
Internet sales tax
You may otherwise hear this referred to as the ‘Amazon tax’; a measure intended to level the playing field between high-street retailers and online retailers. If implemented, this tax could certainly fulfil some of the emergency funding requirements elsewhere, that the Chancellor needs a solution to.
Ironing out the finer details of this tax though, is where the challenge lies; for example, how much exactly will need to be raised and how we account for those businesses who successfully operate on the high-street whilst also enjoying a strong online presence.
Fuel duty freeze
Fuel duty has been static for the past eight years (57.95p per litre, for both petrol and diesel), but Hammond recently acknowledged that, if this were to continue, the cost to The Treasury would be roughly £38m over the next three years.
He also told MP’s that the policy would benefit from being ‘looked at again’, sparking rumours that he would go on to scrap the freeze in the upcoming Budget.
Despite, perhaps, being preferential when compared with other tax hikes, former Conservative minister, Robert Halfon, claimed it would be “difficult to introduce such a huge tax rise hitting millions of working people.”
At time of writing, we can now report that the fuel duty freeze will, in fact, continue for the ninth year in a row as confirmed by Theresa May.
Pensions tax relief
Rarely left alone, pensions tax relief could be subject to further changes in the upcoming Budget, with Hammond allegedly referring to the annual (currently £40,000) and lifetime allowances (currently £1m) as “the last remaining pots of gold we can raid”.
Reducing the thresholds would, without a doubt, help Hammond to generate some of the funding he has promised to the NHS. However, with the Government reporting a promising Budget surplus in July, it is not clear whether tax hikes and relief cuts will be necessary at all.
A tax-break for landlords?
Rumour has it that landlords could be offered a tax-break if they choose to sell their property to sitting tenants. Under the proposal, which Hammond is believed to be weighing up, landlords would not have to pay Capital Gains Tax (CGT) when selling to tenants who had been living in a property for at least three years.
The IR35 rules, which currently apply to the public sector, deem payments made to individuals who are providing services through a personal service company (PSC) to be employment income if the underlying engagement has the features of ‘employment’. Where income is deemed as such, the PSC must operate PAYE accordingly and account for National Insurance contributions (NICs).
The upcoming Autumn Budget brings with it the possibility that the off-payroll rules will be extended to the private sector.
On the 29 October, we’ll be listening to the Chancellor’s address so that we can provide you with our thoughts soon after. Keep an eye on your inboxes, our website and social media as we’ll be summarising and providing commentary on the announcements.