As Jeremy Hunt gets ready to deliver the Autumn Statement this Wednesday, AccountingWEB readers have been busy writing their Christmas wishlists.
AccountingWEB ran a poll to gauge predictions regarding the Autumn Statement and found that 9% of respondents felt there wouldn’t be any changes made, whereas 16% thought the opposite, expecting big things from Hunt. However, the majority (75%) agreed that the Autumn Statement would bring some updates but nothing too major.
While this may be true, there are also some signs that it could be more eventful than people expect.
With inflation falling, suddenly the whispers are getting louder that the Chancellor may potentially cut inheritance tax and extend full expensing. Hunt’s fiscal headroom has grown to about £25bn, which is significantly more than the £6.5bn he had before the March Budget.
With such a considerable budget surplus, can we expect big things on Wednesday?
The Christmas wishlist
Accountants took to this Any Answers post to share their uttermost wishes, which they hope the Chancellor will grant.
An adjustment in the capital gains tax (CGT) allowance was first on the wishlist. “Put the CGT allowance back to £12k+ so I don’t pay as much tax on my investments when I sell,” memyself-eye commented.
Regular commenter, Self-Employed and Happy, wrote that they wished for an adjustment to the corporate tax threshold. They commented: “Extend the 25% corporation tax threshold to £250k instead of catching small businesses with the extra tax over £50k.”
One thing that a lot of AccountingWEB readers had put on their list was to do with pensions. There was hope that there would be a reduction in tax reliefs on pensions as well as a change in pension regulations.
DJKL wanted the ability to borrow up to 75% of their pension scheme’s value, with an unsecured cap of £50,000. They suggested that for amounts over £50,000, certain assets would need to be mortgaged or secured as collateral, similar to life assurance policy loans. “This will create the mother of all spending sprees and boost the economy,” DJKL added.
This was however clearly not on mumpins’ Christmas list who responded: “There are numerous consequences. It would really only impact under 55s and many would borrow £50k and use it to pay down their mortgage.”
And lastly, noise around inheritance tax (IHT) continued. Justin Bryant commented, “It looks like IHT cuts are on the cards (about time too per comments).”
Seasonal doubts
As some of the commenters were hopeful their wishes would be fulfilled, a lot of them expressed scepticism and distrust over what the Chancellor might reveal and its implications.
In another Any Answers post, Joe Soap asked the AcccountingWEB community how to advise clients if IHT was reduced or abolished.
They wrote: “If IHT is reduced or even removed by Hunt next week we can probably expect the next government to reverse that change. Should we advise clients who are rich and elderly that it would probably be tax-efficient to die before the general election?”
It is clear there is a lot of doubt regarding the Autumn Statement and many, like Joe Soap, felt that introducing significant changes would be futile, especially if they are going to be reversed by the next government.
Ireallyshouldknowthisbut commented, “Let the other lot have a go rather than announcing a load of bear traps to trip up Labour politically so they have to undo it all. Utter waste of everyone’s time and productivity.”
Openallhours also agreed and portrayed politics as a strategic game rather than a platform for effective policy-making: “Think there will also be preparation for and maybe some actual traps set for Rachel Reeves. It’s just a game to them.”
“I predict a pocketful of promises, all post-dated, as a poison chalice for Sir Keir in 2024,” i’msorryihaven’taclue added.
However, DJKL revealed his acceptance of the nature of political manoeuvring. They responded: “That’s politics – if any of them could actually achieve anything they would not be doing what they do.”
There is a clear sense of scepticism within the AccountingWEB community, with a general agreement being that the Autumn Statement is more about political tactics than substantive policy changes.
As Autumn Statement tiptoes closer, what do you expect, and how do you feel about it? Let us know in the comments below.
