As this edition went to print, the Treasury had confirmed that the new chancellor would deliver the UK government’s ‘growth plan’ to Parliament on Friday 23 September 2022. Although no specific details had been confirmed, it was expected that this would include a statement on the energy bill relief scheme and potentially a number of tax proposals thought to signal a significant shift in government policy.
Tim Sarson, head of tax policy at KPMG UK, said we were likely to see a ‘move away from Rishi Sunak’s higher tax approach focused on balancing the books towards tax cuts and looser regulation – policies that are intended to boost economic growth and productivity, where the UK has been languishing compared to its peers.
‘We expect the big tax announcements will be limited to the national insurance reversal and corporation tax rate freeze. Those two will cost £30bn, plus the cost of the energy plan, which is not yet known but will be added to the national debt,’ he said.
‘We may get hints on how the government intends to use tax policy to deliver on broader economic agendas such as levelling up and net zero,’ Sarson said. There has also been media speculation of further enhanced tax incentives for ‘investment zones’, which are thought to include lower taxes for workers.
‘The prime minister has already announced there will be no new windfall taxes, which will be a relief for the businesses potentially affected, but they will also be looking to see whether there are any plans to replace the super-deduction which is due to expire in 2023,’ he added.
‘Businesses will also be watching to see if the chancellor intends to push ahead with implementing the global minimum tax. A reversal of this policy would seem highly unlikely following recent strong commitments to the OECD initiatives from five EU nations.’
‘The financial sector will also be watching to see if the cut to the banking surcharge from 8% to 3% when the corporation tax rate rise was announced, will be reversed,’ Sarson added.
Full coverage of the announcements will be included in next week’s edition.
As this edition went to print, the Treasury had confirmed that the new chancellor would deliver the UK government’s ‘growth plan’ to Parliament on Friday 23 September 2022. Although no specific details had been confirmed, it was expected that this would include a statement on the energy bill relief scheme and potentially a number of tax proposals thought to signal a significant shift in government policy.
Tim Sarson, head of tax policy at KPMG UK, said we were likely to see a ‘move away from Rishi Sunak’s higher tax approach focused on balancing the books towards tax cuts and looser regulation – policies that are intended to boost economic growth and productivity, where the UK has been languishing compared to its peers.
‘We expect the big tax announcements will be limited to the national insurance reversal and corporation tax rate freeze. Those two will cost £30bn, plus the cost of the energy plan, which is not yet known but will be added to the national debt,’ he said.
‘We may get hints on how the government intends to use tax policy to deliver on broader economic agendas such as levelling up and net zero,’ Sarson said. There has also been media speculation of further enhanced tax incentives for ‘investment zones’, which are thought to include lower taxes for workers.
‘The prime minister has already announced there will be no new windfall taxes, which will be a relief for the businesses potentially affected, but they will also be looking to see whether there are any plans to replace the super-deduction which is due to expire in 2023,’ he added.
‘Businesses will also be watching to see if the chancellor intends to push ahead with implementing the global minimum tax. A reversal of this policy would seem highly unlikely following recent strong commitments to the OECD initiatives from five EU nations.’
‘The financial sector will also be watching to see if the cut to the banking surcharge from 8% to 3% when the corporation tax rate rise was announced, will be reversed,’ Sarson added.
Full coverage of the announcements will be included in next week’s edition.
