Shorts looks ahead to the 2023 Autumn Statement

The Shorts team is awaiting the 2023 Autumn Statement with keen interest. Chancellor Jeremy Hunt will announce his latest tax and government spending plans on 22nd November. 

Such is the volatility of the UK political environment right now; it’s difficult to predict in what direction the Chancellor will look to move the treasury and HMRC, although the press have been reporting many rumours in the run-up. 

There does, however, appear to reportedly be some limited headroom available for the Chancellor to make tax cuts or increase spending. 

Potential changes on the tax side include the following:

Inheritance Tax (IHT)

One area in discussion currently is Inheritance Tax (IHT), with some politicians and commentators calling for thresholds to be raised and others calling for it to be abolished completely. It has also been suggested that the rate of tax may be reduced.  

Tax relief consultations

There have been consultations in respect of the operation of tax reliefs for Employee Ownership Trusts and Stamp Duty modernisation.

• The former could result in changes to smooth some of the creases in tax reliefs available and closing some potential avoidance loopholes that are not consistent with the aims of EOTs.
• The Stamp Duty system, which used to apply to a wide range of assets, now applies primarily to shares. Replacement with a new transaction tax may be on the cards at some point, but will the Chancellor take that one forward now?
• We expect to also see further details of changes to the continually evolving R&D Tax Credits schemes, which are to be combined into a single scheme. 

Capital Allowances

Capital allowances have seen repeated changes to rates and special arrangements over the last few years. Having only recently introduced “full expensing” as a slightly lower value version of the previous temporary “super-deduction” these are unlikely to change again so soon, but he may extend the time period for which full expensing will be available.

Raising tax thresholds?

The Chancellor may look at raising personal tax thresholds ahead of the upcoming General Election in response to comments that their current freeze until 2028 amounts to a “stealth tax”.

As always, new or modified measures to tackle specific areas of tax avoidance and narrow the tax gap are also likely, although these are often quite niche.