Autumn Statement – what can we expect on Wednesday?
Ahead of the Chancellors Autumn Statement on Wednesday, Mark Tibbert, Partner at Westcotts shares his thoughts on what we can expect.
With just a few days to go until the Chancellor delivers his Autumn Statement we have had a number of weeks of speculation of what he might say. Will we get tax cuts that benefit all or measures that are perceived to benefit the rich? Will it be a bland statement focused more on measures to build on economic recovery and growth, which has been the focus of other actions taken by the government?
At the moment, at least, it seems the Chancellor is managing to keep the contents of his statement a surprise for when he stands up, staying tight lipped in his interviews. We do know that with inflation dropping to a level lower than expected there may well be a little more room for a rabbit out of the hat when the Chancellor stands up. We could potentially see him announcing some tax cuts earlier than he planned, which many were expecting would come in 2024 ahead of a general election.
So what do we think might come on Wednesday?
- Whilst businesses would welcome a cut in the rate of corporation tax, given it has only just increased, it is unlikely for stability that we would see any reduction. However, with economic growth and recovery a key driver we expect to see something to encourage business to invest. Keep your eyes peeled for something on capital allowances and to encourage further investment in green technologies.
- For a number of weeks there have been rumours of potential cuts to inheritance tax. Whilst this may keep some in the Chancellor’s party happy, it is unlikely to be well received by others and would not widely be seen to have any real economic growth benefit. Given this we would expect nothing to happen with inheritance tax at this stage.
- Over the last few days we have seen rumours of potential income tax cuts. Whilst it would be a popular announcement and many expected that we would see cuts announced in March 2024, if we get an announcement on Wednesday we would expect it is likely to be adjustments to the tax bands rather than the rates of income tax, with any changes coming into effect from April 2024.
- The government has been consulting around the research and development tax relief schemes and tweaks have been made in recent announcements. We expect that he may announce some wholesale changes to the scheme to make it a more targeted relief, with a potential merger of the current two schemes.
Whilst if I had written this a month ago, I would have said the announcement would be focused on the state of the economy with minimal, if any tax announcements, it seems more likely now that there will be at least one major tax measure announced on Wednesday. We will be providing live commentary as he speaks and giving our usual considered view on the announcements in the days afterwards.