Labour’s first Budget date confirmed

After weeks of speculation since Labour took power the Chancellor has now confirmed that Labour’s first Budget will be on 30 October 2024. It will certainly be a date to put in your diary with the Chancellor having committed to only doing one Budget event a year it will give the first clear indication of how Labour intend to fund some of their proposals and also what might lie ahead for businesses and tax payers alike.

Preceding the announcement of the date, the Chancellor set the tone for what could be a challenging Budget. By announcing a black hole in the government’s funding of around £22bn it is clear funds will need to be raised somewhere as cost cutting or halting un-started projects will not cover the entire shortfall or pay increases announced for the NHS, teachers, police, prison offices and the armed forces.

While she has reiterated the manifesto pledge to not increase taxes on working people and not increasing national insurance, VAT or income tax, there are clearly stronger chances now that other taxes, such as capital gains or inheritance tax could increase. There could also be scope for increases around the edges, potentially with income tax increases for investment income.

The Chancellor, has also now confirmed some further details on changes that will be coming in and which were already expected;

• The imposition of VAT on private school fees, a manifesto pledge, will definitely go ahead and will apply from 1 January 2025, with a number of anti-forestalling measures in place to prevent fees being paid in advance from escaping the charge.
• Although not a direct tax rate increase the abolition of the furnished holiday letting reliefs, previously announced by the Conservatives, has been confirmed will proceed, and draft legislation has now been released with an effective date for changes to be from April 2025.
• Along with the VAT on private school fees legislation is also to be brought forward to remove the business rates charitable rates relief which applies to private schools.

After a number of years of comparatively bland Budgets we expect any announcements on 30 October 2024 to be anything but and with likely tax increases on the horizon it is worth reviewing your tax affairs to see if anything should be done before the impact of any changes.

Please contact your usual Westcotts contact or nearest office if you would like to discuss what planning may be appropriate.