What the Autumn Statement might mean for tax changes in 2024
23 Nov 2023
3 min read
The summary of the Autumn Statement for High Net Worth individuals and their related structures was very straightforward. Not much has changed.
Those with trading businesses may welcome many of the measures designed to support companies but for private clients themselves the key tax announcements (such as changes to national insurance contributions) are unlikely to have a significant impact.
There were some tweaks here and there (such as an increase to the ATED thresholds - relevant to UK residential properties held in companies), but what is perhaps more interesting is where this leaves us for next year and the run up to the anticipated general election in 2024. In short, it possibly reduces the likelihood of further significant tax changes next year.
There has been a lot of debate about exactly how real the fiscal “headroom” which the Chancellor is using to fund the new tax cuts is. The OBR notes that the headroom has been calculated on the basis of several assumptions which may or may not prove accurate, including significant real terms cuts to government spending and a future fuel duty rise. Whatever the reality, the tax cuts in the Autumn Statement have used up almost all of the headroom which the Government claimed was available and this could leave very little room for maneuver in the pre-election budget next year.
That could in turn mean that:
- Despite the recent rumours, there may be no realistic scope for reducing inheritance tax rates in this Parliament (and perhaps more of an incentive to restrict reliefs, such as the idea of limiting business property relief);
- The same can be said for stamp duty land tax; and
- If the Conservative party want to try and pre-empt Labour by making changes to the “non-dom” regime prior to the election, it is feasible that they could try and sell this as a step towards balancing the books, perhaps funding other tax cuts, albeit that there is also disagreement as to whether such a measure would actually increase or reduce the total tax take overall.
It is also notable that a sizable group of backbench Tory MPs have been pledging not to vote for any measures which increase the overall tax burden. The Chancellor has implicitly endorsed the campaign whilst stopping short of committing to it himself.
Between those pledges and the potential lack of additional money to spend in the Spring, this Autumn Statement arguably lowers the possibility of significant further tax changes ahead of the next election. Of course, another possibility (as flagged by George Osborne) is that the tax giveaway in this Autumn Statement is preparing the ground for a May election next year, meaning that we won't have another budget in this Parliament at all. That feels unlikely if the polls do not move much between now and then but it is more of a possibility now than it was on Tuesday.
Autumn statement – latest: Jeremy Hunt cuts national insurance but tax burden set to hit post-war high