Autumn Budget: Six things we already know

Chancellor Philip Hammond will announce his first autumn Budget on 22 November.

It will be the first official one to take place in autumn for more than 20 years.

Crucially, it will also be the penultimate budget before Brexit.

That means the government is running out of chances to ensure the UK has a ‘Brexit fit’ tax system and to set out its financial vision for a future outside the EU.

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So what’s in store? There’s not likely to be much good news, not least because of the Brexit pressures.

With little room for giveaways there is, sadly, plenty of scope for increased taxes.

Here we round up experts’ predictions about what will be in the famous red box this time…

Stamp Duty holiday

There could be further changes to the unpopular property tax known as Stamp Duty.

The high rates are currently putting people off from moving, which is hitting the housing market.

“Stamp duty remains a significant tax on mobility and barrier to activity,” says north London estate agent Jeremy Leaf.

“Increasing the lowest stamp duty thresholds in line with inflation would help aspiring first-time buyers address their biggest obstacle – raising a deposit.”

The Chancellor may use the opportunity to introduce a Stamp Duty “holiday” for first-time buyers and those who are downsizing, reckons Helena Kanczula, corporate tax director at Blick Rothenberg.

“Additionally, a Stamp Duty instalment payment regime could be introduced for properties over a certain value, such as £500,000, as the upfront cost of Stamp Duty can be prohibitive,” she said.

ISAs and children’s tax-free savings accounts

The main ISA allowance is now set at £20,000 – after a big jump this year from £15,240 – so it is unlikely we will see any change, says Danny Cox, financial planner at Hargreaves Lansdown.

But there could be changes on Child Trust Funds and Junior ISAs.

“We are expecting a rule change at some stage on CTFs, which would mean rather than maturing at age 18 they would automatically switch into an adult ISA,” he says.

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But the Chancellor could simplify children’s savings by merging CTFs with Junior ISAs.

Contribution limits for the two increase by inflation each year so could be raised from the existing £4,128 level to £4,248, taking into account that inflation is 3% and the figure is likely to be rounded for easy division by 12 for monthly payments.

Lifetime ISAs

The Chancellor will be seeking out ways to help younger taxpayers, says Iain McCluskey, a partner at accountants PwC.

Tax breaks for the young, funded by cuts to pension tax relief have been mooted, he says, but perhaps more likely are amendments to the Lifetime ISA .

That is the tax-free savings account which was launched in April aimed at people under 40.

“Boosting the amount that can be saved each year, and allowing savers to make withdrawals without incurring harsh penalties would make the product more appealing to young savers,” points out Mr McCluskey.

Meanwhile the age of eligibility could be increased to 50 to help those looking to get on the housing ladder.

Student loans

The Tories have already outlined some planned changes to student loans.

Tuition fees will be frozen, with the rise due this year cancelled. The government has also confirmed it will raise the income threshold at which loans start to be repaid to £25,000 – and then peg it to earnings.

But My Hammond may go further. “He could reduce the interest on the loans by linking them to CPI rather than RPI,” says Danny Cox of Hargreaves Lansdown.

That would bring an end to one of the last remaining links to the old inflation measure.

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Pension changes

A cap on the amount of tax-free cash people can take from their pension pots could be announced in the Budget.

At present 25% of a pension can be taken as tax-free lump sum, but it is strongly rumoured that the amount will be slashed to £100,000 per person.

“Capping the amount of tax-free cash that can be taken from pensions would claw back some much-needed tax for the Treasury,” says Sean McCann, financial planner at NFU Mutual.

“Setting it at £100,000 would mean those with pension savings greater than £400,000 would be affected.’’

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There could also be a reduction in tax relief rates or allowances with a switch to a flat rate of tax relief one option being rumoured.

“Currently, the Government adds up to 45% to pension contributions depending on how much income tax you pay, points out Andy James, head of retirement planning at Tilney.

“A new system could see everyone’s contributions topped up by the same amount regardless of how much tax you pay.”

That would hit higher-rate taxpayers.

There could also be a cut to the pension annual allowance – the maximum amount of money you can pay into your pension each year. It’s currently at £40,000.

Discount rail fares for young people

Ina a bid to woo young voters, the Chancellor will reportedly extend the 16-25 railcard to people aged up to 30.

The card, which costs £30 for a year, offers discounted rail fares of 30% off for any journey within the UK.

Stephen Joseph, head of the Campaign for Better Transport said: “This is good news for people under 30.

“Unfortunately it does nothing for regular commuters as you can’t use a railcard to buy a season ticket.”