Sponsored content: Will we feel the sting as a result of the Chancellor’s spending review?
The much-anticipated Autumn Statement – dubbed the mini budget – came and went last week, yet still we are waiting to see what the Chancellor really has in store.
“It is still a case of wait and see,” said Keith Senior, a director at Jacobs Allen Chartered Accountants & Chartered Tax Advisors.
In the weeks leading up to the Spending Review, the Office for Budget Responsibility gave indications of improved growth and this, Mr Senior believes, may have taken the sting out of the Chancellor’s Autumn Statement.
“The forecasted growth reduces the borrowing requirement and reduces the level of savings needed. It may well be that if the forecast is wrong, the Chancellor will need to raise more money or cut back further in the next year or two.
“We will have to wait until March next year to get some answers.”
Mr Senior had predicted that George Osborne may cut the tax relief on pensions for higher earners, but that blow has yet to be dealt.
Another target he thought the Chancellor may have in his sights was buy-to-let landlords. The relief on mortgage interest payments was announced in the Summer Budget to be restricted to a standard 20pc transitioned in over four years from April 2017 – which could make property rental less alluring to landlords who are higher rate tax payers, but landlords have been a target for some time and it seemed likely that some other bad news would be in store. “What he did was put stamp duty up by 3pc on second homes and buy to let properties to restrict the market in that way. It will raise an estimated £1billion in tax a year by 2020.”
The move is a double win, not only will it provide a most-welcome boost to Government coffers, but it will also act as a form of deterrent to those buying a second property, thus giving first-time buyers and families moving up the chain a helping hand.
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However, existing landlords escaped unscathed, thus protecting the rental sector in the short term.
“It is a reasonably clever policy, and it is not the first time the Chancellor has made a clever move,” said Mr Senior, who is based in the company’s Bury St Edmunds office.
For more personalised advice on how the Autumn Statement will affect you or your business, contact Jacobs Allen.