Five key tax talking points before next week’s budget
As the chancellor prepares for 28 October, we unpack the facts and figures – and the implications any changes could mean for you As John Healey prepares his first budget as chancel
By The Guardian
John Healey is expected to use his first Budget as chancellor to address pressure on household finances and business costs, while keeping Labour’s election promise on the three main taxes.
The Budget is due to be delivered on Wednesday, 28 October. Labour’s manifesto said it would not raise income tax, National Insurance or VAT for working people.
Those taxes are among the UK’s largest and broadest-based sources of revenue. Any additional money raised by the Treasury is therefore expected to come from more targeted measures.
One proposal under consideration is a higher tax charge on banks. Reports suggest the surcharge on bank profits could rise from 3% to 8%, reversing a reduction introduced by former chancellor Jeremy Hunt.
The change could raise about £2 billion a year for the Treasury, according to reports cited by the Evening Standard. The money is expected to help support measures aimed at easing financial pressure on households.
Capital gains tax has also been a focus of debate. The tax applies to profits made when assets such as shares or property are sold.
Mr Healey has rejected calls for a large increase that would bring capital gains tax closer to income tax rates. Warnings included the possibility that higher rates could encourage wealthy people to leave the UK or delay selling assets.
A further reported idea is to make online marketplaces such as Amazon and eBay responsible for collecting VAT from retailers selling through their platforms. The proposal would apply to retailers with annual turnover above £90,000 and could raise up to £1 billion, according to reports.
That money could help fund a reduction in business rates for smaller high-street businesses. Another reported option would increase the threshold at which small companies begin paying business rates from £12,000 to £18,000.
The government has also indicated that reducing the cost of doing business and cutting red tape will be priorities. Mr Healey has said he is aware of the difficulties facing companies dealing with higher costs and tax rises.
The final tax measures will be confirmed when the chancellor delivers the Budget on 28 October.