Research from the National Institute for Economic and Social Research (NIESR) suggested that the Treasury would have headroom as high as £166 billion, thanks to a surge in tax receipts and a significant drop in energy prices. Despite the reported surplus, the Chancellor’s current reported position for the upcoming Budget report is against significant “tax giveaways” and is intending to cut borrowing with the aim to further balance the books.
These are some of the expected vocal points of the upcoming budget reports this Wednesday.
Business Tax
According to Jeremy Hunt, the current main rate of Corporation tax will remain at 25%, despite pressure from conservative MPs to cut the corporation tax level to the current Irish Corporation Tax rate or lower.
The Financial Times have reported that the UK will aim to join and implement the global initiative of imposing a minimum tax rate of 15% on all major corporations, despite implementing this global initiative threatening to undermine the goals set forward by Brexit.
Other speculations include:
- Potential changes to the current capital allowances available to Holiday let owners.
- Potential changes to the current R&D tax allowances available to businesses.
- Eliminating the IR35 exemptions for small businesses.
Personal Tax
There is an expectation that the Spring Budget report will provide a substantial increase to the £1,000,000 lifetime allowance to tax-free pension savings. There is an additional expectation that the current £40,000 annual cap on annual pension contributions will be increased.
Childcare support for low-income parents will be increased in the Budget. The current maximum levels have been frozen since 2006 at £646 per month for one child, or £1,108 for two or more children.
A major speculation is that the government will aim to implement major changes to the existing Non-Domicile regime. This will be relevant to all persons residing in the UK pre-domiciled status, as well as any persons owning UK properties, companies or having business dealings with the UK.
The Budget report is expected to aim to implement new Green Policies such as:
- Announce the allocation of £20 billion over the next twenty years towards the development of carbon capture technologies.
- Extend the Energy Price Guarantee.
- Potentially eliminate ‘pavement tax’ for Electric vehicles.