As the Chancellor’s first Autumn Budget edges closer, industry experts have speculated on the measures that could be announced by Mr Hammond. Here, we take a look at some of the key Budget rumours, and outline a handful of the proposals made by leading business groups in their Autumn Budget wishlists.
Tackling the issue of ‘intergenerational fairness’
The Treasury has hinted that the Chancellor is seeking to cut tax relief for older employees in order to tackle the issue of ‘intergenerational fairness’ and the discrepancies that exist between younger workers and older taxpayers.
Mr Hammond is, according to some government sources, poised to cut national insurance contributions for workers in their 20s and 30s by making savings on pension tax relief for older employees, in an attempt to appeal to a younger demographic following the loss of the Conservatives’ majority in the snap General Election.
Cutting stamp duty for first-time homebuyers
In a further bid to promote intergenerational fairness, the Chancellor is allegedly looking at ways in which stamp duty land tax could be reduced for first-time homebuyers. Conservative backbenchers are reportedly urging Mr Hammond to offer such homebuyers a ‘stamp duty holiday’.
Meanwhile, the Association of Accounting Technicians (AAT) has suggested that the liability to pay stamp duty should be switched from the buyer to the seller. Whilst the AAT stated that it does not support calls to scrap stamp duty entirely, it recognises that the stamp duty regime ‘adds a significant burden to both homebuyers seeking to move and to first-time buyers trying to get on the housing ladder’.
Abolishing the business rates ‘staircase tax’
During a recent hearing with the Treasury Select Committee, the Chancellor reportedly acknowledged that the introduction of recent changes to the business rates system has been putting additional financial pressure on small businesses in England and Wales.
Dubbed the ‘staircase tax’, businesses with offices on multiple floors of a commercial property have been receiving separate business rates bills for each floor they occupy, provided the areas separating the offices are communal. Some firms in England and Wales have seen their business rates rise significantly as a result.
Mr Hammond is said to have told the Committee that he is ‘looking at’ legislative steps that can be taken to abolish the tax, and many expect further details to be announced during the Autumn Budget.
Building affordable homes on Green Belt land
The Chancellor is reputedly keen on making use of Green Belt land to build more affordable homes, and is supposedly looking to relax the planning restrictions on building on such land.
Mr Hammond is also considering permitting landlords to borrow more in order to create additional new homes.
What would business groups like to see?
Both the Confederation of British Industry (CBI) and the British Chambers of Commerce (BCC) have called for the government to overhaul the business rates system, whilst the Institute of Directors (IoD) has urged the Chancellor not to use the Budget as ‘an excuse for delaying much-needed reform’ of the UK tax system.
The IoD has also recommended a temporary increase in the Annual Investment Allowance (AIA) from £200,000 per annum to £1 million.
Expecting the unexpected
As always, we will have to wait for the Chancellor’s speech to know exactly what he has planned for the UK economy. But with Brexit around the corner, and with uncertainty taking its toll on the economy, the Chancellor is likely to be looking to reassure UK businesses and taxpayers in his upcoming Budget speech.