Autumn Budget Predictions: what will and won’t be in the Budget

Simon Heath, a Partner at Heligan Group, has shared his top four predictions for the Autumn 2024 budget

The Autumn budget in 2024 is just around the corner, and with politicians returning to Westminster, the question on most people’s lips is: just how painful it will be?

With Keir Starmer already indicating that difficult decisions will be taken, many assume tax rises are on the horizon. Anxiety about the Budget is already being expressed by those with businesses and other asset classes and to date little information is being leaked on what it’s likely to include. Simon Heath, Partner at Heligan Group, shares his predictions about what lies ahead.

Capital Gains Tax increases a near certainty

“Labour’s manifesto has ruled out raising VAT, Income Tax and National Insurance, leaving only a handful of meaningful taxes to target aggressively. 

“Increases to Capital Gains Tax (CGT) usually sparks limited political fallout, and as such, it’s widely anticipated that there will be increases in CGT to move towards harmonisation with income and dividend taxes. Politically, this is an easy win as CGT only affects those with significant capital appreciation and is seen as a redistribution of wealth.”

Lowering the Inheritance Tax cap is a dangerous move, but possible

“Amendments to inheritance tax and changes to pensionable thresholds will be more sensitive to the general public as they are levied at either the point of death or retirement, which are emotionally charged times in the lives of individuals or broader families.  

“In many ways, Inheritance Tax can be seen as ‘theft’, as it’s based on cumulative assets generated over a lifetime that has already been taxed through income, VAT, and other taxes."

“As seen with the negative reaction to pulling the winter fuel allowance for vast swathes of pensioners, it is a delicate balance for Labour to raise taxes given the self-imposed limitations in the manifesto. Regardless, I still think that reducing the cap on inheritance tax is also likely to be on the agenda. Whether this works out politically for Labour remains to be seen.”

 

The average Brit might not feel the pinch immediately, and the changes could raise tax revenues

“Naturally, Inheritance Tax and CGT don’t hit people’s pay packets, so it’s unlikely that most people will feel the effect of these changes."

Regarding the impact on tax revenue takings, measuring CGT is challenging as it is a transaction cost specific to a scenario. Still, it is estimated to raise £15bn in further tax according to the OBR. Although given it is typically higher net worth individuals that pay CGT, their tax mitigation plans may reduce this potential substantially. Inheritance Tax similarly is a transaction based on the value of the estate of the bereaved."

How much could it cost the average Brit? 

“The most impact on the average Brit would be continuing the policy of freezing the current thresholds for income tax beyond 2028, as wage inflation will drag lower and middle earners into higher tax brackets."

“The current freeze to 2028 will likely generate £40bn additional tax through this fiscal drag.  Extending to 2030 or beyond will amplify this effect.”

“Other tax changes will likely cover reducing the tax benefit from pension contributions and/or reducing the lifetime allowance on the total pension pot.”

Notes to editors   

About Heligan Group 

Heligan Group is an intelligence led investment and advisory group specialising in partnering with businesses that contribute to global safety and security. With a growing presence across various geographies, Heligan Group stands as a leader in its field, combining expertise with innovation.

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