The Chancellor of the Exchequer, Jeremy Hunt, has announced that he will deliver his Autumn Statement 2023 to Parliament on 22 November. The event will not only shed light on the government’s economic and fiscal plans, but also provide crucial insights for individuals and businesses, potentially influencing their financial strategies.
This statement, accompanied by an economic and fiscal forecast from the Office for Budget Responsibility (OBR), will likely be the penultimate fiscal address before a Spring Budget next year and a general election.
The backdrop against which this statement unfolds is complex. Families and businesses are grappling with rising costs of living, interest rates climbing from 0.1% in November 2021 to 5.25% currently, persistently high inflation at 6.8% as of July, and a 70-year-high tax burden.
David Rose, Senior Corporate Tax Director at Beavis Morgan, says: “With the highest tax burden in 70 years, a 6% Corporation Tax increase from April 2023, and frozen personal tax thresholds until 2028, even without new tax measures, a quarter of the UK workforce may soon be paying higher rate tax.”
The big question on everyone’s mind is whether we can anticipate major tax changes in November or if Chancellor Hunt will reserve them for a pre-election Spring Budget in 2024. While it remains uncertain, it’s worth noting that public opinion and fiscal measures often intersect.
Hunt faces pressure to balance market considerations with the economic concerns of individuals and businesses, given his reputation as a tax-raising Chancellor. Yet, the need to stimulate economic growth ahead of a potentially competitive general election might prompt the government to introduce tax cuts and incentives.
The looming general election is expected to push both the current government and the opposition to offer enticing policies to the electorate, even as public borrowing reaches historic highs.
A Changing Landscape
As specific proposals emerge, Beavis Morgan will assess their impact and help our clients adapt their financial strategies accordingly. With the potential for a change in government on the horizon, the coming months promise to be transformative in the realm of fiscal policy.
David Rose emphasises the significance of the Autumn Statement for businesses, stating, “The Autumn Statement serves as a pivotal moment for businesses to evaluate potential changes in corporate tax policies. Staying informed and adapting strategies accordingly is essential to ensure tax efficiency and financial resilience in this ever-evolving landscape.”
Neal Groves, Personal Tax Partner at Beavis Morgan, highlights the importance of this announcement for individuals, noting, “The Autumn Statement is a critical juncture for individuals to assess potential personal tax implications and make informed financial decisions that align with their long-term goals.”
We will continue to keep you updated as we navigate the evolving landscape leading up to the Autumn Statement 2023, and we will proactively engage with you to ensure that you are well-prepared for any potential shifts in the financial landscape.