PREVIEW: Autumn Statement (22 November)
Driving to work this morning, I switched to Radio Four, not my favourite choice of radio station, but I wanted to catch up with feedback on Rishi Sunak’s address to the Conservative Party Conference.
As luck would have it, the Prime Minister was being interviewed, albeit a recording from the previous day, and he got quite a grilling.
What interested me as the interview rumbled on was the number of times Sunak dropped into the conversation that he had only been in office for a year and that this gave him the chance to have a bit of a dig at those who had gone before him and to say he was the new kid on the block.
When it comes right down to it, HS2 was so far removed from the Tees Valley as to make next to no difference when it’s scrapping to Manchester was announced. Of course, we all hope that ‘Network North’ will ‘do something’ for us but we have been there before.
The bigger picture, staying with rail, is the fact that the likes of France and Spain have high speed trains that run the length of their countries and the UK does not and it would appear never will have. How our region can ever truly hope to compete on a level playing field is a huge and pertinent question.
Anyway, enough of my railway pre-amble!
Where I am heading is to piggy-back on Sunak’s ‘work anniversary’ by reminding us that the first Jeremy Hunt-Rishi Sunak Autumn Statement took place on 17 November 2022 and we have the second one lined up for 22 November 2023.
Hunt will deliver his statement against the backdrop of ongoing industrial action; the war in Ukraine; a lowering of the inflation rate, but which at 6.7% for the year to August is still high, and a General Election on the horizon.
Having frozen personal tax allowances, tax rates and thresholds through to April 2028, well beyond any General Election date, Hunt, under pressure in some quarters for a pre-election tax cut, could achieve this by tinkering with that timeframe.
The attractiveness of Capital Gains Tax rates against income tax rates has had many pundits tipping an increase in CGT rates or the introduction of a hybrid rate and of late, what would be the radical abolishing of Inheritance Tax has been a rumour doing the rounds. Would this be replaced by some form of wealth tax that is in place in many European countries?
What else might Hunt unveil?
Well, might there be an increase in the standard rate of VAT coupled with a scrapping of VAT on power; changes to the clawback of Child Benefit for those earning over £50,000 which has seen HMRC zealously pursuing those affected and, with the high street still struggling, will there be some incentives or reliefs for those businesses still frequenting high streets?
Side issues at the moment but which will require attention at some point in the future are the fall in yields for the Treasury’s coffers as a result of Sunak’s smoking proposal and from the move from petrol and diesel engines to electric vehicles.
All will be revealed on 22 November, look out for our commentary!
By Ian Kelly, Tax Partner (comments/questions to )