Head of International Tax and Tax Policy at KPMG in the UK Melissa Geiger shares her predictions.
It is over 200 years since the country last endured a whole year with no Budget. Even before this recent 12-month hiatus, the last few years had only offered slim pickings from a tax policy perspective, hemmed in as the Chancellor was by Brexit uncertainty. Not that businesses minded – they tend to prefer a light-touch grazing approach to tax policy making rather than an ‘all you can eat’ bonanza.
Nevertheless, a certain expectation has been growing over what this budget might offer, especially with a fat conservative majority providing a certain amount of freedom to the government. The last minute change of the head chef from Sajid Javid to Rishi Sunak made some think the event would be delayed with the Budget needing a bit more time before the juices ran clear. Instead the new Chancellor is pushing ahead with the original timetable, which may indicate that the Budget was more oven-ready than we had thought.
Other ingredients which could add more spice to the flavour combination are:
With this being the first budget of the new Government, there will be pressure to deliver on key election promises – particularly in terms of rejuvenating the regions and investing in the NHS. However, this will need to be balanced against other factors such as the Bank of England’s reduced growth rate forecasts.
Businesses, generally fans of a more simple fare, will want stability and certainty. However, given the need to balance the scales, the Chancellor may reach for more imaginative ingredients. Which probably means that the wait for stability in the tax code continues. Where change is envisaged, we would encourage the Government to enter into early and comprehensive consultation with stakeholders.
And let us not forget that the Chancellor’s offering will also be closely watched by those with a more international palette. European Union (EU) jurisdictions will be seeking to get a sense for the Government’s post-Brexit strategy.
There will be spending, the core question of this budget is whether the Government raises taxes or borrows to fill the gaps. We eagerly await to see what the Chancellor cooks ups.
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