Potential Tax Changes in Upcoming UK Budget
Chancellor Rachel Reeves has announced that the upcoming Budget will focus on raising taxes to fill a £22 billion deficit. While taxes affecting 'working people', such as VAT and income tax, will remain unchanged, options include freezing tax thresholds further, increasing employer National Insurance, and making changes to inheritance and capital gains taxes. Fuel duty could also be adjusted after a decade, and pension tax relief may be reduced.
Chancellor Rachel Reeves of the Labour government has indicated that the upcoming Budget will involve difficult decisions about taxation to address a £22 billion deficit in public finances.
Scheduled for 30 October, the Budget is expected to raise taxes and implement spending cuts to the tune of £40 billion.
Reeves has ruled out raises for taxes affecting 'working people', such as VAT, income tax, and National Insurance.
However, other taxes may see increases.
Options include extending the freeze on income tax and NI thresholds, which could generate an additional £7 billion annually.
Employer National Insurance contributions may rise, potentially affecting hiring practices.
There is also speculation about changes to inheritance tax, which now impacts fewer than one in 20 estates, and adjustments to capital gains tax, which could see its rate increase.
Fuel duty, having been static for a decade, is another potential area for adjustment, along with the reduction of pension tax relief, which would standardize the relief rate across all income levels.
Scheduled for 30 October, the Budget is expected to raise taxes and implement spending cuts to the tune of £40 billion.
Reeves has ruled out raises for taxes affecting 'working people', such as VAT, income tax, and National Insurance.
However, other taxes may see increases.
Options include extending the freeze on income tax and NI thresholds, which could generate an additional £7 billion annually.
Employer National Insurance contributions may rise, potentially affecting hiring practices.
There is also speculation about changes to inheritance tax, which now impacts fewer than one in 20 estates, and adjustments to capital gains tax, which could see its rate increase.
Fuel duty, having been static for a decade, is another potential area for adjustment, along with the reduction of pension tax relief, which would standardize the relief rate across all income levels.
