What excitements are in store for us?

Philip Hammond will introduce in his Budget announcements tomorrow, 22 November 2017 and there is continuing speculation in the financial press about what kind of changes he will make.

Politically, Mr Hammond is being encouraged to be radical, to offer more to younger voters. Changes being considered include:

  • 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.
  • 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.
  • 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.
  • 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.
  • Switching stamp duty liability – the Association of Accounting Technicians, which is our professional body, has promoted the idea that stamp duty liability be switched from the buyer to the seller, to 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.
  • Reducing tax relief on pension contributions – presumably withdrawing relief at higher rates and replacing with a flat rate of around 33%.  We certainly hope that this one doesn’t come to fruition!
  • The Chancellor is also tipped to invest a further £10bn into the Help to Buy scheme.

We certainly don’t envy Philip Hammond at the moment.   We only hope he doesn’t do another U-turn and bring back in proposals to drop the dividend allowance from £5000 to £2000.  The original plan to drop the allowance from £5000 to £2000 in April 2018 was shelved when the Government stripped back the finance bill in order to get it through ahead of the 8 June election.  So let’s hope Mr Hammond doesn’t reinstate those plans.