There is continuing speculation in the financial press about the likely changes that Philip Hammond will introduce in his Budget announcements on 22 November 2017.
Changes mooted include:
- Easing the burden of student debt – this may include a one-off write down of loans, reducing interest charges and we could see an increase in the income threshold to £25,000, the point at which loan repayments are required to be made.
- Lowering tax rates for younger people – if enacted this could prove to be a challenge for HMRC’s ailing computer systems as it would introduce a raft of alternative rates based on age.
- Reducing tax relief on pension contributions – presumably withdrawing relief at higher rates and replacing with a flat rate of around 33%.
- Reducing or exempting older persons from stamp duty – this would encourage retired people to down-size and make room for younger families to up-size.
- Switching stamp duty liability – the Association of Accounting Technicians has even promoted the idea that stamp duty liability be switched from the buyer to the seller. This would encourage upward mobility as stamp duty liability on an exchange from a less expensive to a more expensive property would result in a lower tax charge.
- Easing stamp duty on high value sales – there is concern that the present punitive stamp duty rates for high value sales are slowing down the entire UK property market and that even marginal reductions in rates will counter this situation.
- The Chancellor is also tipped to invest a further £10bn into the Help to Buy scheme.
- The Enterprise and Seed Enterprise Investment schemes have been put under review this year. Could this signal a reduction in tax relief offered from 30% to 20% and perhaps increasing the period EIS shares be held?
Politically, he is being encouraged to be radical, to offer more to younger voters. Undoubtedly, Mr Hammond has an unenviable task. It will be interesting to see how he uses his Budget announcements later this month to reinvigorate interest in his party’s future election prospects, and how that will affect tax payers.