The Budget date has officially been set. The Chancellor, Rachel Reeves, is likely to announce measures to balance the public finances, while boosting growth and attracting more investment.
For people tax planning in Cheshire and across the UK, there will be particular interest in what changes will be announced, as the Government has previously committed not to raise VAT, National Insurance or income tax. The pressure is certainly on to address government debt and long-term borrowing costs. The National Institute for Economics and Social Research estimates that the gap in the public finances could reach up to £50 billion a year.
What options are available to the Treasury?
There’s a chance Reeves may introduce a windfall tax on bank profits. There have also been hints she may reform the local council tax system or bring in new duties on property. Potential growth-boosting announcements include support for Northern Powerhouse Rail. There might also be a revision of planning laws and cuts to regulation.
Much may depend on the global economy, and her hand may be forced by geopolitical uncertainty and trade tensions. The Government aims to build on the recent trade deal with India and capitalise on better relations with the EU. Reeves will likely pay particular attention to the International Monetary Fund forecasts when it convenes in Washington in October.
The Treasury has asked the Office for Budget Responsibility (OBR) to assess the Government’s proposals as it seeks to reassure the financial markets. It is likely Reeves will study the OBR’s forecasts closely before deciding whether to tax further or cut spending.
The Budget will take place on Wednesday, 26 November.
