Speaking in the Downing Street ‘rose garden’, made famous during the pandemic for lockdown parties and ‘that’ Dominic Cummings interview, Keir Starmer delivered a sobering speech on 27th August that sets the tone for the budget at the end of October.
It’s “going to be painful” he said, asking the country to “accept short-term pain for long-term good”.
The £22bn ‘black hole’ in public finances was repeated. He admitted removing winter fuel allowance was a difficult choice but said there will be more “difficult decisions” to come and that “broadest shoulders should bear the heavier burden”.
Speculation about tax rises are inevitable when using language like that, with Rishi Sunak the first to point to it as the inevitable outcome of a Labour government.
There was no detail on what the budget would contain but the PM did re-iterate his his pledge, made during the election campaign, that the government would not raise National Insurance, income tax or VAT. Chancellor Rachel Reeves has taken a similar line.
Attention will inevitably fall on inheritance tax, capital gains tax, and tax relief on pensions as the alternative sources of increased tax revenues, and ones which theoretically target those with more wealth or higher earnings.
Changes to pensions relief, such as the introduction of a flat rate of relief, are rumoured annually ahead of almost every budget, and rarely turn into reality. Then again, so does an Oasis reunion…
Whatever happens our objective is to utilise the tax allowances which are available to you to the maximum, and that remains core to our ongoing service to you.
*The Financial Conduct Authority does not regulate tax planning
