Direct taxes


Income tax

Raise the personal allowance


The 2017 Conservative manifesto reiterated its pledge to raise the personal allowance to £12.5k by 2020, but some business lobby groups have called on the Chancellor to speed up rises in personal tax allowances to ease the consumer squeeze.

Raise higher rate threshold


Hammond is committed to raising the higher rate (40%) threshold to £50,000 by 2020 from its current level of £45,000.


National Insurance contributions (NICs)


very likely

After his u-turn on increasing Class 4 NICs in the week following the last Spring Budget, Hammond has recently announced that the abolition of Class 2 contributions will be delayed from next April until the following year. Presumably this is set to be confirmed. See also 'controller clampdown' below.

Reduction for younger workers


It has been suggested that Hammond could reduce NICs for those in their 20s and 30s.



Annual pension allowance


Hammond might cut the annual pension allowance. The amount that can be saved into a pension has been lowered by his predecessors and currently stands at £40,000. 

Lifetime pension allowance


The Chancellor could reduce the lifetime pension allowance so more pension benefits incur an extra tax charge. Its current level, since 6 April 2016, is £1m, having been reduced from £1.25m.


Inheritance tax

Lower AIM share exemptions


The Budget might reduce the inheritance tax benefits associated with AIM share investment. Investments directly in shares listed on AIM are exempt from inheritance tax if held for two (plus) years, provided they are not dealing in property and investments/trading businesses. 

Excise duties and other indirect taxes


Stamp duty land tax

Lower rate for FTBs

very likely

A cut in stamp duty for first-time buyers (FTBs) is being widely touted; reports are that the Chancellor might look for a 1-2 year FTB SDLT holiday. This could be funded by an increase in the 3ppt stamp duty surcharge for new purchases of additional homes. This change is more likely than wholesale reform, like making SDLT a 'seller's tax'.


Dividend tax

Higher dividend rates


The Treasury may look to raise the tax due on dividends by announcing a further cut to the tax-free allowance, currently £5,000, and reducing to £2,000 in April 2018. Another option would be to raise the tax rates. The current rates are 7.5% (basic rate tax payers), 32.5% (higher) and 38.1% (highest).


Annual Tax on Enveloped Dwellings (ATED)

Disincentivise property holding by companies


ATED is an annual tax payable mainly by companies that own UK residential property valued at more than £500,000. An adjustment of the tax bandings or annual charges could be another way of reducing property holding incentives for companies. 


Fuel duty freeze



Fuel duty has been held at 57.95p per litre since the March 2011 Budget. This could be cut to help under pressure households, but another freeze would seem more likely.


Vehicle levies

New diesel car levy


The Chancellor might look to increase tax on new diesel vehicle sales, perhaps creating a new levy.


Freeze in haulage levies

very likely

In the Spring Budget the Chancellor froze, for another year, both the vehicle excise duty rates for hauliers and the HGV Road User Levy. It looks likely this freeze will be repeated.


Beer, wine and spirits duties

Beer duty cut


In March, beer duty increased by 2p a pint, the first rise in five years. Might the Chancellor opt to reverse this?


Scotch whisky duty cut


Possible reversal of the rise in the 'dram duty' in March this year amid heavy lobbying by the Scotch Whisky Association. Whisky shares the same duty as other spirits, so reversing the hike would have to see it separated or a wider rollback across other spirits. 


Soft drinks levy

Raise the sugar tax


The levy comes into effect in April 2018. The 18 and 24 pence per litre planned rates for the main and higher bands respectively could be raised given the Spring Budget claimed it had pushed producers to reformulate sugar out of drinks.


Investment tax breaks

Tightening of venture capital trusts


Investors in venture capital trusts, which invest in start-ups, are given a 30% tax break. The extent of this tax break could be reduced or limited to more risky start-ups.

Corporate taxes


Corporation tax

Accelerate planned corporate tax cuts


The Corporation Tax main rate (for all profits except ring-fenced profits) is at 19% for the years starting 1 April 2017, 2018 and 2019. Then it is 17% for the year starting 1 April 2020. One option might be to reduce the rates more quickly in readiness for Brexit.


Raise bank surcharge


The Chancellor might consider raising the 8% corporation tax surcharge on bank profits. However with numerous banks said to be considering their location options ahead of Brexit, the timing for such a move would not be ideal.


Business rates

Freeze business rates


The Chancellor is facing calls for the near 4% rise in business rates due in April 2018 to be scrapped. Hammond is poised to opt for a switch to a CPI-linked (rather than RPI-linked) increase, according to the Sunday Times. The Spring Budget 2017 included a £300m relief package for the worst-affected firms. Might this be extended?




Increased health budget


A cash boost for the NHS, alongside additional resources to ease back on the NHS pay cap.



Retrofitting social housing with safety features


Cash to fit Housing Association tower blocks with sprinklers and other cash to aid the response to the tragic Grenfell Tower fire.


Help to Buy


At Tory party conference it was announced that the government will find an extra £10bn for the Help to Buy scheme to let another 135,000 people get on the property ladder. 


Tuition fees


During Tory party conference May vowed to freeze university tuition fees. More broadly, the Chancellor is working on fees reform. Reports have included action to align charges for a particular course more closely to the salaries its graduates can command, while another suggestion is that he is considering a cap on all fees at £7,500 from the maximum of £9,250. 


Student loans


Theresa May has also pointed to a possible increase in the salary threshold where graduates have to pay back their loans; we may see more detailed plans on this. Another option might be to look at reducing the rates charged on student loans.


Brexit cash

Additional departmental funding for Brexit preparations


The Prime Minister has already announced £250 million in extra departmental spending for Brexit preparations - which includes planning for 'no-deal' scenarios.


Universal Credit

Lowering the taper rate


Hammond is being urged to lower the 'taper rate' on universal credit to encourage people receiving in-work benefits to increase their hours without seeing so much of their additional pay taken away. The taper rate was reduced from 65% to 63% at the Autumn Statement last year (i.e. a rate of 63% means losing 63p of your maximum Universal Credit award for every £1 earned over your work allowance).


Public sector pay

Lifting the public-sector pay cap


Hammond is expected to announce at least a partial lifting of the cap on annual pay rises for public sector workers. Health Secretary Jeremy Hunt has already told MPs that a seven-year run of 1% rises or pay freezes would come to an end with next year’s award for England’s NHS staff.


Diesel scrappage scheme


The Society of Motor Manufacturers and Traders (SMMT) wants to see government-backed incentives to encourage people to buy low-emission diesel vehicles. A diesel scrappage scheme is one option, to ease the blow of a higher diesel vehicle tax rate, though it is also worth noting that some manufacturers have already introduced their own trade-in schemes.

Other items



Contractor clampdown


There are reports of plans to amend legislation to respond to the increase in offshore loan schemes and other contrived vehicles to artificially enhance contractor take-home pay. Alongside the delayed removal of Class 2 NICs (see above box on NICs), this should help to boost exchequer revenue from self employment. 


National Living Wage (NLW)

Raising of the NLW


The National Living Wage is a minimum wage all employees aged over 25 are legally entitled to £7.50 since April. The government has set a target for the NLW to amount to 60% of median earnings by 2020. The government might announce the next step in the NLW’s path toward the 60% threshold, depending on the advice of the Low Pay Commission. 

Immigration skills charge

Raising the immigration skills charge


Medium and large businesses are charged £1,000 annually for each non-EU worker that they sponsor, up to a maximum of five years, a figure set to double before the end of the Parliament. Given the Brexit uncertainty currently facing businesses, the government will probably stop short of raising it in this budget for fear of giving businesses another reason to relocate out of the UK. 

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