The Autumn Budget on Wednesday will set out the government’s plans for the economy based on the latest forecasts from the Office for Budget Responsibility. Here’s what to look out for:-
Lots of new homes & incentives to achieve this
The Chancellor is under pressure from most young voters and their parents, and many parts of his party to encourage the building of a lot of new houses. He has 300,000 new homes will be built a year, but hasn’t given any finer details regarding what proportion will be affordable, or where they will be built. The budget will hopefully shed light on his plans. Expect an increase in Help to Buy schemes and tax breaks for small/medium house builders.
Rough seas ahead
The UK is the slowest-growing G7 economy, Britain has endured the lowest growth and the highest inflation of the ten major EU economies, and the deficit isn’t getting any smaller. We expenxt the Chancellor to announce the latest forecast from the Office for Budget Responsibility. Following a report from the Institute for Fiscal Studies, due to the weak performance of the economy, the deficit in 2021-22 could be £36bn – £20bn higher than the £17bn forecast back in March.
We should expect driverless cars in the UK by 2021, with it expected the government will announce £400m will be spent on electric car charge points, £75m on artificial intelligence, and £100m to boost purchases of clean fuel cars.
More for the younger generation
There are already leaked plans about the extension of the 16-25 young person’s railcard to under-30s, and rumours stamp duty for first-time buyers will be scrapped.
It is likely the chancellor will make some provision for the big Brexit breakup. Government departments and agencies will need to recruit extra staff in the case of no deal, with £250m already been allocated to prepare for the scenario of no deal.
Hidden Tax Rises?
It’s likely there will be some hidden tax rises – possibly by freezing income tax thresholds, but the the tax-free personal allowance needs to go up to £12,500 by 2020 in order to meet a Tory pledge.
Universal Credit backtrack
We know that the government plans to cut the payment delay of the new benefits system from six to four weeks, so it could be announced in this Autumn Budget.
Here are further details about the Governments new Autumn Budget timetable.
- The UK is the only major advanced economy to make major changes to the tax system twice a year
Businesses, economy and tax experts like the International Monetary Fund, Institute for Government, the CBI, Chartered Institute of Taxation and the IFS have all been calling for this change. It will mean businesses and people face less frequent changes to the tax system, helping to promote certainty and stability.
- Spring Budget 2017 will be the final Budget held during springtime
The move to a single fiscal event will be made after the spring Budget in 2017. There will be a second Budget before the end of 2017 to switch to the new timetable, which will then be followed in future years.The Office for Budget Responsibility (OBR) is required by law to produce two forecasts a year. One of these will remain at Budget. The other will fall in the spring and the government will respond to it with a Spring Statement.
- Finance Bill will follow the Budget, as it does now
We expect a Finance Bill in spring/summer 2017 following the spring Budget.From winter 2017, Finance Bills will be introduced following the Budget. The aim will be to reach Royal Assent in the spring, before the start of the following tax year. This change in timetable will help Parliament to scrutinise tax changes before the tax year where most take effect.
- Tax policy consultation will continue and be strengthened
The government remains committed to consulting on policy as set out in ‘The new approach to tax policy making’ in 2010. Most measures proposed at a Budget will be subject to policy consultation in the spring and publication of draft legislation in the summer, before being legislated in the Finance Bill after the following Budget. To build on this and allow for an earlier stage of involvement on key strategic challenges, the Chancellor has said that he may launch consultations on how to address these longer-term issues at the Spring Statement.
- From 2018 ‘Legislation day’ will move to the summer
Since 2011, most tax policy consultation summaries and draft Finance Bill legislation have been published on ‘Legislation day’, following the Autumn Statement. In 2016 this will be on 5 December. From 2018, under the new timetable, this will move to the summer. As now, the date will continue to be announced by written ministerial statement.
- An Autumn Budget means tax changes will be announced well in advance of the start of the tax year
The single fiscal event and new timetable to bring forward tax changes so they are legislated for before the start of the tax year will be beneficial to tax stakeholders. Making the transition to the new timetable will require adjustments to the normal tax policy making process due to the shorter interval between the two Budgets. Arrangements will be decided individually for different policies and set out to stakeholders by HMRC. In the normal way, these will where possible provide for consultation on policy proposals and on draft legislation.
- 2018 will see the first Spring Statement
The Spring Statement will respond to the updated OBR forecast for the economy and the public finances. The Chancellor has said that the government will consider longer-term fiscal challenges and start consultations on how they can be addressed. The government will retain the option to make changes to fiscal policy at the Spring Statement if the economic circumstances require it.