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Lost in the noise of yesterday’s social care announcements, Chancellor Rishi Sunak has named October 27 as his next Budget Day - and the time that announcements about future property-related tax changes are most likely to be made.
On the same day there will be a three year spending review, work for which has already started - Sunak yesterday asked all government departments to identify at least five per cent savings and efficiencies from their day-to-day budgets for unspecified reinvestment elsewhere.
In addition, it was announced yesterday that there would be a 1.25 per cent rise in National Insurance from April 2022 and a tax on share dividends will also go up by 1.25 per cent; these would become a separate tax on earned income from 2023 - all of these would be used to generate revenue for the government’s social care reforms.
At the last Budget in the spring, and at a so-called ‘tax day’ of announcements shortly afterwards, it was anticipated that there may be changes to property taxation.
Those changes did not materialise - it is thought because the government waned to wait until the worst of the pandemic ended - but analysts suggest changes may occur this time round.
The two changes considered most likely earlier this year were:
- enacting the recommendations of the Office for Budget Responsibility on Capital Gains Tax, aligning CGT rates more closely to income tax or restricting the range and value of exemptions;
- replacing the outdated and unpopular council tax with an annual tax based on property value (some analysts have suggested that stamp duty could be abolished as a separate charge and integrated into this annual tax as well).
Yesterday the Chancellor announced that on October 27 the government would update the country on all aspects of its so-called Build Back Better programme, including housing.
Sunak himself says: ”At the Spending Review later this year, I will set out how we will continue to invest in public services and drive growth while keeping the public finances on a sustainable path.”
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After George Osbourne's austerity, i was amazed how the Gov't threw billions and billions almost recklessly at covid. Now of course they will want some of that repaid. We had a taster of October's budget yesterday and likely more to follow. More tax hikes takes away the incentive to work. But for those who work or those who invested, expect the worst.
what would you have done
Where do i start? First of all George got the huge stamp duty increases wrong. George's austerity went on too long. The covid contributions from the Gov't were too generous. The NHS will never have enough money. I hear it is the only system like it in the world, why? Social care is a massive problem and losing the family home to pay for it is cruel. Yesterdays NI increase is for social care, but not much yet and may not even reach social care. Now the Gov't wants its money back as expected. So be prepared to pay up.
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