Families are prepared for further tax hikes as the Chancellor prepares to present his budget on October 27th.
Rishi Sunak has already warned of further pain to help the country “rebuild better” after the coronavirus.
Any tax changes would be in addition to the $ 20 billion freeze in income tax allowances announced in the spring. That increase was announced as energy bills skyrocketed ahead of winter.
Here are the guidelines, both expected and rumored, that could hit your pocket the most, and details on when the declaration will take place.
When is the autumn budget?
After the spring budget on March 3, the autumn budget is the Federal Chancellor’s second financial statement this year. Mr Sunak will present his budget to Parliament on Wednesday 27 October.
What will be in the household?
Schedule for Jobs – 10/10
The focus of the autumn budget will be on Mr. Sunak’s “Workplace Plan”. The Chancellor already has 500 million. This also includes career assistance for older employees, based on the additional funding for apprenticeships and internships announced in the spring.
The Chancellor is expected to continue addressing the UK labor shortage issue in his statement this month, highlighted by the truck driver shortage that has destroyed supply chains.
Green gas tax – 9/10
The government is planning to move the green electricity surcharges currently on household electricity bills to gas bills as part of its “net zero” campaign. It will add hundreds of pounds to the already skyrocketing bills amid a Europe-wide gas shortage.
An announcement of the change is expected shortly before the UN climate summit “Cop26” at the end of the month. The tax changes are expected to be phased in over a period of up to 10 years.
The move will hit customers who have traditional gas boilers. It is intended to encourage the introduction of more expensive but more environmentally friendly options such as heat pumps or hydrogen boilers.
Council tax increase – 9/10
The council tax has been increased every year for the last 10 years among the Conservatives and it is likely that the Chancellor will allow the town halls to raise local taxes again, this time by up to 5 percent. This would bring the annual council tax bill for the average Group D property down to nearly £ 2,000.
Increase in the cost of alcohol – 7/10
The price of a pint could change in the wake of a move to alcohol tax after a review was announced in the 2020 budget. The Treasury Department has sought opinions on the revision of the archaic taxes on beer, cider, wine and spirits. Beverage taxes, which bring in £ 12 billion annually, date back to the 17th century.
Changes could include standardizing the different tax rates for different types of alcohol or increasing the tax on alcohol annually in line with inflation. Other options include different prices depending on where drinks are sold, e.g. B. Lower prices for pubs than for supermarkets. The tariffs on beer, cider and spirits have been frozen since 2017.
Pension robbery – 6/10
Experts have suggested that the state could raise significant funds by restricting tax breaks for pension savings for high earners or by capping the amount workers can set aside for their retirement.
The Conservatives have cut the “lifetime allowance” by around £ 800,000 since the 2010 coalition. Such changes would prove extremely unpopular, however, and are unlikely to follow the recently announced increases in social security contributions and dividend tax rates.
Graduate tax – 5/10
Graduates must lose hundreds more pounds by paying off student loans. Rumor has it that Mr Sunak is considering lowering the earnings limit at which student loans must be paid back from £ 27,000 to around £ 23,000 – a move that would bring in around £ 2 billion a year.
It would undo an earlier threshold hike, which used to be £ 21,000, carried out under former Prime Minister Theresa May. However, few details of the reported plans were released.
Changes in capital gains and inheritance tax – 3/10
Similarly, experts have suggested that capital gains tax rates could be increased to match income tax, from 28 percent to 40 percent for a higher rate taxpayer.
They have also proposed cutting valuable inheritance tax breaks, like the 100 percent exemption on Aim shares, in order to raise funds. However, the CGT and IHT together bring in less than £ 16 billion a year – a fraction of the £ 200 billion annual income tax increase.
Social security increase – 10/10
As announced in September, from April social security rates for both employees and self-employed will increase by 1.25 percentage points across earnings ranges, bringing in around £ 12 billion a year. From April 2023, working pensioners will have to pay 1.25 percent of their earned income for the first time.
Dividend tax collection – 10/10
The dividend tax rates will also rise from April by 1.25 percentage points to 8.75 percent for income taxpayers with the base tax rate and 33.75 percent for taxpayers with higher tax rates. The allowance of € 2,000 remains the same. The increase will bring in around £ 600 million.