The Chancellor is due to announce his Autumn Budget to Parliament tomorrow. The
Autumn Budget will be the second financial statement, following the Spring
Budget earlier this year.
Any tax changes announced will be in addition to the recent 1.25% National Insurance social care levy and the £20bn freeze in income tax allowances.
What could be announced in the Budget?
Council tax has risen year on year over the past ten years and is likely to continue to increase. It is possible that council tax rates could increase by up to 5%. For the average band D property, this could increase the annual tax bill to nearly £2,000.
Student loan threshold
The earnings threshold at which students repay their student loan could be reduced to around £23,000 from £27,000 which would raise around £2bn a year.
Capital gains and inheritance tax
Capital gains tax rates could be increased to match income tax rates of 20% for basic-rate taxpayers and 40% for higher-rate taxpayers.
Similarly, inheritance tax breaks such as the 100% exemption on AIM shares could be revoked in order to bring in funds.
However, capital gains and inheritance tax raise under £16bn each year combined, which is a fraction of the £200bn raised each year in income tax.
It was announced last month that the dividend tax rates would increase by 1.25% from April next year. This will push the basic rate to 8.75% and the higher rate to 33.75% however, the £2,000 allowance will remain. It is suggested this will raise around £600m.
The government may cut back tax relief on pension savings for higher earners or set a cap for how much workers can put aside for retirement.
The lifetime allowance has been reduced by around £800,000 since 2010 however, this change is unlikely to follow the recent announcement to increase National Insurance contributions and dividend tax rates.
Want to keep up to date with the latest tax news?
Keep an eye on our news page for updates on the Chancellor’s announcement.