The autumn Budget will take place on 27 October 2021

Capital gains tax rates to rise?

Increasing capital gains tax, possibly by aligning with income tax rates, would be a more visible tax rise but may not collect a great deal relative to the total tax take. Announcing a tax rise for say April 2023, could incentivise asset owners to sell up in 2022/23 and bring a nice cash boost for the Treasury in the short term. However, in the light of the NIC increase, perhaps making technical changes that cut back CGT reliefs is a more likely option.

More taxes on Businesses?

As we know corporation tax is already set to rise substantially in 2023 and various forms of pandemic support (from furlough to business rates relief) are being phased out this autumn, The main rate of corporation tax will be increased to 25% from April 2023 for companies with profits of at least £250,000. At the same time, a new small companies’ rate of 19% will apply to companies with profits of up to £50,000. It doesn’t seem likely that the Chancellor would risk many more business tax increases. But that doesn’t mean that the Government can’t increase its tax take from businesses in other ways.

HMRC is already highly focused on tax errors and avoidance related to pandemic support and the government might offer a ‘disclosure facility to all those coming forward to correct mistakes in the short term –
Similar facilities addressing thorny issues such as collecting unpaid tax on offshore assets have been successful revenue raisers in the past.

What more incentives is the Chancellor going to give to help Businesses grow?

Super Deduction & R&D Tax Reliefs

The post-pandemic recovery will be high on the Chancellor’s agenda but it is unlikely that there will be many more measures like the capital allowances super deduction announced in the March Budget. The review and consultation into improving the UK’s R&D tax reliefs may result in announcements of enhancements to R&D reliefs – perhaps even higher rates of relief.

Kickstart Scheme Extension till March 2022

Short extensions of the Kickstart scheme and apprenticeship grant scheme. There may be successor schemes for 2022 to replace these.

Special Work Visa

The Government has also announced special work visa schemes for EU workers to reduce skills gaps in the short term – for example, a special scheme to increase the number of HGV drivers.

Tax Relief Investments

It is also possible that venture capital tax reliefs for investors (EIS, SEIS etc.) will be enhanced to boost business investment now that the UK is not restricted by EU rules.

Business Rates Rising from April 22?

Reform of Business Rates is a can that has been kicked down the road so many times that many questions whether true reform will ever take place. The Chancellor promised to publish the final findings of the Government’s Business Rates Review this autumn – having delayed the final report due to the ongoing pandemic.

Pensions Changes?

The Government has already announced that it will “temporarily” set aside the triple lock for the state pension because the current high rates of wages growth would push up pensions faster than general inflation. The state pension will probably increase in line with inflation.