With the Autumn Statement fast approaching, business owners across the UK are hopeful that Chancellor Jeremy Hunt will announce new measures to enliven the nation’s lethargic economic outlook - but will he deliver?
Over a quarter of businesses report that cost increases to goods and services have impacted their operations since August (up from 10% this time last year) and 24% admit to decreased turnover, putting the pressure firmly on the Conservative government to alleviate mounting stresses on beleaguered businesses.
What can business owners expect from the impending budget on Wednesday 22 November?
With the freeze on UK tax thresholds and diminished allowances reducing the amount of take-home pay workers are entitled to now extended until 2027/28, many are eager to see their tax allowances move in line with inflation and rising costs.
If inflation-busting targets are met, the government is open to considering tax cuts. Conservative MP Robert Jenrick recently confirmed this live on the BBC - providing, that is, that UK inflation falls below 5%. With CPI inflation currently standing at 6.7%, it would need to drop by 1.7% to make this a possibility. That may seem unlikely, but it’s certainly not impossible.
It seems far more likely that Mr Hunt will delay any tax changes until the Spring Budget next year when further economic data will be available. That in itself has downsides if the economy and inflation prove resistant to improvement.
One thing we can all look out for is confirmation about rumoured changes to inheritance tax - which is affecting more families every year in the UK. Last year, the tax brought the Treasury a record £7.1 billion, with a sustained surge expected as estates continue to accrue value.
This is likely to be a pivotal policy in deciding the outcome of the next general election, which is expected to take place next year. The Conservatives have been vague on potential changes to the estates levy - but Labour has proposed a much more rigorous overhaul which could completely abolish two core exemptions: agriculture and business relief.
While we can’t accurately predict the outcome of the election, we can be sure that this is likely to be a hotly contested issue that could well impact voters’ decisions.
The 75% business tax rate relief is set to come to a close in April 2024 - but again, with an election looming, now would be an ideal time for the Chancellor to back businesses. Doing so would ensure that eligible companies in retail, hospitality, and leisure have access to greater support and increased cash flow to support economic growth.
While nothing has been announced yet, Labour continues to lead the Conservatives strongly in the polls; can the Chancellor afford to overlook UK PLC so close to the ballot booth?
Assuming there are to be changes announced, our team and I will be sharing our thoughts in a special post-Statement webinar on Friday 24 November, when I’ll host a panel of Duncan & Toplis experts to provide a detailed summary of the announcements and what they mean for individuals and businesses in our region.
Details on how to join this online seminar can be found here.