Latest Budget predictions and speculation

The recruitment of MP Torsten Bell to help draft the Autmn Budget has prompted renewed speculation of tax rises to come. The Mail’s This is Money outlines seven previous tax raising ideas he’s had, from scrapping the residence nil rate band for inheritance tax and aligning capital gains and income tax rates to bringing down the VAT registration threshold to £30,000.

Limiting the tax-free lump sum individuals can take from their pensions savings could help the chancellor raise over £2 billion a year, according to the Telegraph. According to the paper, the idea will be among a list of money-raising proposals by civil servants to help the chancellor, as she seeks to cover a Budget shortfall of as much as £50bn.

Rachel Reeves is considering extending capital gains tax to high-priced homes, the FT reports. While people’s main residences have always been excluded from CGT, the chancellor is said to be considering a “mansion tax” on high-value homes that would see houses with values above a certain threshold losing the exemption, the paper reports.

The government may replace stamp duty with a new property tax the Autumn Budget, the Guardian says. The Treasury is reported to be considering options that include a new tax on the sale of homes worth more than £500,000 and overhauling council tax, potentially replacing it with a local property tax.

The Treasury is considering reforming inheritance tax rules on gifts, according to the Guardian. Changes could target the seven-year rule, under which gifts are free from IHT where the giver survives for this period afterwards, and under which IHT reduces on a sliding scale from three years onwards. 

Pantheon Macroeconomics predicts “back-loaded stealth and ‘sin’ tax hikes” as the chancellor seeks to cover a “£20B gap against headroom”. The economists suggest income-tax thresholds freezes and “either pension-tax or unspecified spending restrictions in 2029-30” will also play a role.