Following a landslide victory for the Labour Party in the July 2024 General Election, the new Government faces a series of tough decisions in the upcoming Autumn Budget in October 2024, says London accountancy firm Grunberg & Co.

The firm, which provides a full range of accountancy, tax and business advisory services to businesses and individuals, took particular note of the uncertain tax situation facing the Government, as ministers attempt to plug a ‘hole’ in the public purse.

This comes despite the Labour Party declaring its intention not to raise taxes on working people or create a wealth tax at this stage.

Nimesh Patel, Tax Partner at Grunberg & Co, said: “It is likely that there will be tax increases based on recent announcements from the Chancellor regarding a lack of public funds, although it’s not yet clear which taxes will be targeted.

“We know that incorporated businesses will be hoping that there are no increases to Corporation Tax and VAT, whilst self-employed individuals will be keen for Income Tax and National Insurance (NI) to remain the same.

“If, however, these taxes remain unchanged, that leaves Capital Gains Tax (CGT) and Inheritance Tax (IHT) being open to changes. High net-worth individuals will be wary of potential increases to these taxes, meaning they are likely to be satisfied if these taxes are left as they are.

“This is a clear balancing act for the Government, with no clear answer that will satisfy all taxpayers and the need for public funds.”

Regardless of which taxes are affected, said the firm, this is likely to be a Budget concerned with tax and those who the Government believes “should be paying more of it”.

Nimesh continued: “It is difficult to predict what will be announced in the Budget but, based on the announcements so far, it is likely to be a Budget that impacts individuals more than businesses.

“There does not seem to be many announcements on measures to support business growth.

“In order to provide businesses with more confidence, it would be helpful to have some measures to help businesses at a time when their costs have been increasing significantly and margins have been squeezed.

“As for individuals, there are a few potential changes mentioned in the media which include a reduction in pension tax relief for higher rate taxpayers and additional rate taxpayers, or an increase in CGT and IHT.”

This comes in addition to plans to apply VAT to school fees for private education, which have already been announced.

Nimesh concluded: “The new Government has also indicated that the transitional rules that were due to come in following the changes to the taxation of non-UK domiciled individuals should be scrapped as they believe non-UK domiciled individuals should be on the same footing as UK domiciled individuals as soon as the new rules take effect.

“It’s likely, then, that we’ll see individuals impacted from a number of angles in this Budget as the Government seeks to bolster public finances and close tax loopholes.

“Individuals and businesses will likely need to take advice from a tax expert or their accountant in the lead up to, and after, the Autumn Budget to avoid taking a bigger hit than is necessary as new measures are brought into place.”

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