The countdown is on to March’s Budget – the first since Boris Johnson’s general election victory – and the big question is what it will mean for business in the post-Brexit world?
New Chancellor Rishi Sunak has already indicated that when he stands up to deliver his speech it will be very much focused on the Conservative’s campaign messages of levelling up the economy and “unleashing the country’s potential”.
To that end we may see some headline making pronouncements on infrastructure projects and regional investment – which may be good news here in the North West of England.
Any positive announcements on improving east-west communication links – particularly on Northern Powerhouse Rail – would be a massive boost for the region’s economy.
Small business owners will also be looking with interest to see what measures it will contain for them. And which of the Tory’s manifesto pledges are turned into action.
During the campaign the Conservatives committed to aiding small business through a range of measures, including helping firms with spiralling labour costs.
The party also said it would end the late payment crisis by introducing a reform package put on pause by the election. That would be widely welcomed by small business.
Hard-pressed businesses operating in the high street will be looking for movement on business rates – including a “fundamental” review of the current system at the earliest opportunity.
The Tories committed themselves to no increases in the rates of income tax or national insurance. They have said VAT will also remain at the current rate and that is likely to remain the case.
When it comes to corporation tax the possibility of a fall is remote. It is more likely to stay at 19 per cent after plans to cut it to 17 per cent were put on hold shortly after Boris Johnson’s victory.
There may be some announcements in respect to business property relief and entrepreneur’s relief. The Tories’ manifesto promised to “review and reform” the latter.
One controversial move being predicted by some commentators surrounds pension tax relief – which has been a core incentive in encouraging people to save for their retirement.
There has been speculation that the Chancellor is looking to strip higher earners of their 40 per tax relief, equalising everybody at 20 per cent or possibly levelling rates at 30 per cent.
That would see an £80,000 earner putting £15,000 a year into their pension losing £3,000 if the rate drops to 20 per cent. Analysts say the move would raise £10bn a year for the Treasury.
There have also been reports that the freeze on fuel duty could end – with the first hike in a decade. Again, that would be a controversial change in policy from a Tory government.
To discuss any aspect of this article and any tax issues please contact me on 01772 430000