Thread by @hselftax

My #Budget2023 predictions (will be on air in a programme syndicated to many local radio stations from 12 noon).

A “Budget for Growth”, says the Chancellor

1/n

What he wants to do is to stimulate growth, so that there is good news before the next General Election (expected May 2024). But he needs to avoid the disaster of Kwasi Kwarteng’s September mini Budget, which spooked the markets with unfunded cuts.

#Budget23 2/n

He also wants to steal Labour’s thunder where he can - so it looks as if the big announcement will be on childcare (more details below).

If he can get this right, it could be a big boost to helping parents who want to do so work more hours.

#Budget23 3/n

He has already confirmed he will keep the Energy price cap at £2500 - but what about support for businesses?

#Budget23 4/n

https://twitter.com/jeremy_hunt/status/1635900032082665476

The rise in CT to 25% looks as if it is here to stay (would be a big U turn to ditch it now, and it raises about £18bn pa)

#Budget23 5/n

gov.uk/government/new…

However, per @thetimes , he is expected to give 100% investment allowances for the next 3 years, costing about £7bn pa.

This is less generous than the 130% super deduction (which expires 31 March) but will be a boost to larger businesses.

#Budget23 6/n

Smaller businesses won’t see an impact (but are also not affected by rise in CT if their profits are below £50k). The existing Annual Investment Allowance (AIA) gives 100% allowances for the first £1m, which covers about 90% of businesses.

#Budget23 7/n

What the allowance is likely to do for larger businesses is to bring forward infrastructure projects already in the pipeline (which makes the deferral of HS2 seem even more daft to me)

#Budget23 8/n

For individuals, the childcare proposals are said to be:
- 30 hours free childcare extended to 1 and 2 yo’s
- increased funding for existing programme for 3 and 4 yo’s
- faster payment to those on UC

If delivered, this could make a real difference to parents.

#Budget23 9/n

It is likely that fuel duty will continue to be frozen, costing about £6bn pa.

While this will be welcomed by drivers and businesses, it does little for those who can’t afford a car, and goes against the Net Zero agenda.

Cost of freeze since 2011 c£65bn (OBR)

#Budget23 10/n

The other change which has been strongly rumoured is an increase in the pensions lifetime allowance to £1.8mn (from £1.073m), taking it back to where it was in 2012.

The Times calculates this could benefit up to 2 million people.

#Budget23 11/n

Those who will benefit will be mainly those on final salary schemes, almost all in the public sector.

In particular, this is an issue which has been repeatedly cited as a cause of early retirement by senior doctors. But it’s another tweak to a v complex system.

#Budget23 12/n

What won’t we see? Almost certainly any change to the rates of income tax, NIC or VAT - he won’t want to put them up and it’s expensive to reduce them.

#Budget23

And we probably won’t see anything radical such as a Wealth Tax or changes to the Non Dom regime - not likely territory for a Conservative chancellor.

#Budget23 14/n (?)

Sadly, he probably won’t get round to fixing the complexity of the High Income Child Benefit Charge (#HICBC) even though this is a nightmare for many of those who have found themselves affected

#Budget23 15/n

And the freeze in Personal Allowances (and Higher Rate bands) is likely to stay, gradually dragging more and more people into higher rate taxes.

#Budget23 16/n

So in summary the big measure for individuals is likely to be the childcare support, and for larger businesses the investment allowances.

Not much for smaller businesses or most of those without children, except those with large pension pots.

#Budget23 17/17 end.

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