Commenting on the announcement of the UK Budget and Spending Review by Chancellor Rishi Sunak MP, Tax Director Angela Keery said:

“The Budget and multi-year Spending Review announced by the Chancellor was a cautious step forward in managing public debt and addressing the economic challenges caused by Covid-19. Set to the backdrop of rising inflation, official forecasts revealed lower than previously assumed damage to the economy by one percent, yet businesses remain perplexed as to what the current fiscal climate will mean for their costs in the coming months.”

“In reality, businesses could be left facing dramatic increases to their tax bills in January 2025 due to reforms of basis period rules, the period for which they pay tax each year. Pair that with the pending Health and Social Care Levy, a rise in the National Living Wage and the previously announced increase in Tax on Dividends and Corporation Tax rates, there is an understandable sense of anxiety that take-home earnings for individuals and businesses will drop significantly.”

“Opportunity does exist, however, for local businesses via the reduction in Air Passenger Duty for regional flights from 2023. This will help with greater regional connectivity and companies doing business in other parts of the UK. Several other incentives for business were also announced in the form of investment in R&D, and reform of same so that it better supports business.

Ultimately, the Budget delivered fewer tax reforms than anticipated, with changes to Inheritance Tax / Capital Gains Tax not included. While this may be welcomed in the interim, there is no doubt that the Chancellor is delaying the inevitable.”

If you have any queries about how the budget will affect you or your business please contact Angela on 028 90 323466 or email angelakeery@bakertillymm.co.uk