Over the past few months, the UK Government has provided a large amount of support to businesses and individuals to help throughout the coronavirus crisis. According to the Office for Budget Responsibility (OBR), this is estimated to cost around £330bn by the end of the April 2020-21 tax year.
In his next Budget, Chancellor Rishi Sunak is set to announce the much anticipated plans for tax and spending for the rest of the financial year following the end to the furlough scheme on 31 October.
When is the Autumn Budget 2020?
The Autumn Budget usually takes place in October or November but this year may be a little different. Chancellor Rishi Sunak will deliver the next budget in mid to late November at the earliest but a second wave of coronavirus could push the date back even further into next year.
What will the Autumn Budget include?
It is predicted that the Autumn Budget will be dedicated to rebuilding the economy following six months of increased unemployment and decreased consumer spending.
Currently, any indications of what may be included are just speculation, however, there are many rumours about what is to come.
Whilst we’d love to be able to predict the future, our team at Ryans can only make a guess about what we think might happen. And who knows, maybe we’ll get something right in our following predictions!
Ryans’ Predictions for the Autumn Budget
Corporation Tax
A rise in corporation tax may be announced in the budget. It is currently set at 19% but we think it may rise to 20
Capital Gains Tax
We reckon Capital Gains Tax will increase to be the same as income tax rates.
VAT
We’re predicting that the threshold for registration will be reduced from £85,000 to £52,000, meaning any companies earning over £1,000 a week will need to register for VAT.
Annual Investment Allowance
There may be a temporary increase in the Annual Investment Allowance from £200,000 to £500,000.
Insurance Premium Tax
There could be an increase in Insurance Premium Tax in the budget from its current standard rate of 12% and its current higher rate of 20%.
Personal Allowance
It seems quite likely that the Personal Allowance will be frozen at £12,500.
Employment Allowance
We also think it is quite likely that Employment Allowance will be frozen for another year at £4,000.
Income Tax and National Insurance
Income Tax and National Insurance may be frozen and aligned more closely together in order to create a simpler and fairer system for businesses and taxpayers.
Pension Tax Relief
We reckon the higher rate relief will either be reduced 9by 30% perhaps) or removed entirely.
Fuel Duty
It seems highly likely that the Chancellor will continue to freeze fuel duty for the tenth year in a row. In the previous mini-budget, he cancelled a scheduled 2p-a-litre tax ris at the pumps that was set to take effect in April.
Alcohol, Cigarettes and Tobacco Duty
Whilst we think alcohol duty will be frozen, we predict that the duty rate on cigarettes and tobacco will continue to increase by 2.5% above Retail Price Index (RPI) inflation.
Company Cars
We predict that double/crew cab pick-ups will be classified as cars when it comes to tax rates. This would come after a long dispute, initiated by Coca-Cola around whether double cab pick-ups are vans or cars.
For more information and updates on financial news, why not visit our other helpful articles here or get in touch with the team.