 What to expect from the Autumn Statement 2023 Times update Daily Telegraph update Financial Times updates BBC NEWS briefing HM Treasury website See a guide to Budget statement buzzwords. More... Posted: 231030 |
Autumn
Statement 2023: when is it and what will Jeremy Hunt unveil? Chancellor of the Exchequer Jeremy Hunt will deliver his Autumn Statement on Wednesday 22nd November to the House of Commons when he will update MPs on the country's finances and the Government's plans for tax and public spending, based on the latest forecasts from the Office for Budget Responsibility (OBR). The Chancellor's statement will need to provide information on the UK Government's anticipated revenue generation and announcements on plans for taxation and public spending. The Chancellor has often ruled out the possibility of tax cuts in the near future, saying it will be 'virtually impossible' to do that until the UK Government's high debt levels are brought down and the economy is under control. But recently it seems the Chancellor may consider tax cuts after all, so long as it meets the target of halving inflation by the end of this year. That pledge was made by the Prime Minister in January 2023 when CPI inflation was 10.1%, so it would need to drop to around 5% by December 2023. It currently stands at 6.7% but with the country's public finances have worsening, it will mean there is very little room for any kind of tax cut in the Autumn Statement. The Autumn Statement will start at 12.30pm after Prime Minister's Questions and it's expected to last for a maximum of an hour. As usual we will have a prompt report on the statement and the measures announced by the Chancellor of interest to classic motoring enthusiasts which will posted here within an hour or so of his sitting down in the House of Commons. What could we see of interest to classic car enthusiasts? We hope the freeze on fuel duty will continue and also that there will be no further increases in Insurance Premium Tax (IPT). Classic car enthusiasts will very much hope the rolling 40 year road tax exemption for cars with "Historic VED "status will continue. |
| Report
of the Autumn Statement As usual we will have a prompt report on what the Chancellor has to say shortly after her finishes his statement to MPs highlighting the key points of interest to V8 Register members.. See our earlier report on fuel duty |
Fuel
duty hike The Chancellor has been under pressure to raise fuel duty has been mentioned in press reports. Fuel duty is a tax included in the price you pay for petrol and diesel at filling station pumps and also on oil used for heating. It was cut by 5p in March 2022 by the then Chancellor Rishi Sunak, but Treasury officials have reportedly told Hunt he needs to hike the rate by at least 2p to try and recover around £5bn of tax revenue lost each year since the duty was reduced. That could see fuel duty rising to 55p a litre for petrol and diesel and with VAT also levied on fuel duty, there is a compounding effect on any fuel duty rise. Fuel duty was last raised in 2011 and Hunt has previously said that any continuation of the current freeze would be depend on the state of public finances. Break from the state pension triple-lock Many pensioners will have been hoping for a good increase to their state pension in the next tax year. There have been rumours the Treasury is considering plans to "adjust" the 'triple lock', a protection that dates back to 2010 and guarantees pensions will be boosted by either September’s inflation, earnings growth (from the period between May to July) or 2.5% - whichever is highest. Based on current wage growth figures, it would mean a serious rise of 8.5% from April 2024. With other segments of the population struggling with higher mortgage rates and the cost of living it's possible the Government may decide to exclude bonuses from its triple lock calculation, lowering the wage growth figure to 7.8%. It's been reported that step could save the Government £1bn. But any adjustment to the triple lock would be controversial, because the Conservatives pledged in their last election manifesto not to tamper with the triple lock formula. To help fund the rise from the triple lock formula the Government might consider scrapping the annual winter fuel allowance for all but the poorest pensioners. Other topics UK public warms to road pricing as fuel duty replacement is considered The Government's ban on the sale of new petrol and diesel vehicles from 2030 has made reform of motor taxes an urgent question for the Treasury because the switch to electric cars means almost £30bn in fuel duty raised annually for the Treasury will need to be replaced. But politicians have shied away from introducing road pricing as an alternative, however recent polling for the Social Market Foundation suggests that the conventional political wisdom that voters are opposed to road pricing no longer holds true. Its research found that 38% back road pricing to replace fuel duty and other taxes, with just over a quarter opposed (26%). The rest were open to persuasion, the SMF said, and shared a strong public perception that fuel duty was a heavier burden than other taxes. Fuel duty is 58p per litre of petrol or diesel in the UK and the rate has been frozen by successive Conservative chancellors for more than a decade after becoming a politically sensitive issue after protests. Capital Gains Tax changes Unlike other types of investment assets, the profit you make upon the disposal of a classic car does not generally attract Capital Gain Tax (CGT). This is because cars are generally classed as a ‘wasting asset’ that is estimated to have less than 50 years’ worth of use remaining. Even if the vehicle remains in existence for a period in excess of those 50 years, the same exemption applies. The tax is paid when people sell assets such as shares or a second home. There are rumours that the current CGT rates may be tinkered with and it's been suggested that CGT rates could be aligned more closely with income tax rates, which could mean scrapping the current CGT rates of 10% and 20% (or 18% and 28% for property) and instead making everyone pay income tax rates on their gains. A report by the Office of Tax Simplification, published in November 2020, recommended that CGT rates should be increased to bring them into line with income tax. But it would be unlikely to raise significant extra amounts of tax, as it is typically paid by only about 275,000 taxpayers and raises less than £10bn a year. Wealth Tax There has been much political discussion about a one-off wealth tax to help pay for the huge debt built up by the UK Government providing various levels of COVID support measures. Some would prefer to see a more permanent wealth tax and others firmly against it but there are very few examples of wealth taxes that work well and over the last few decades many have been abandoned. The UK already has two ways in which to tax assets; capital gains tax and inheritance tax. Both of these regimes are far from perfect, but it arguably makes more sense to deal with some of the flaws in those two regimes rather than introduce a third asset tax. The UK Government has already discounted a one-off wealth tax so, although the conversations may well continue, but KPMG say they "would not expect the introduction of a wealth tax during this Government. But never say never!". |
|
|||
