Chancellor Rachel Reeves has confirmed that she will deliver her first Budget on 30 October 2024.
In her speech to the House of Commons on 29 July 2024, reporting on the Treasury’s recent assessment of the state of public spending, the Chancellor also set out a number of tax commitments, including the following:
Draft legislation was published on:
There were policy announcements on:
A call for evidence was announced on the reform of the tax treatment of carried interest. The government is particularly interested in feedback on: (i) how the tax treatment of carried interest can most appropriately reflect its economic characteristics; (ii) what different structures and market practices there are with respect to carried interest; and (iii) what lessons that can be learned from approaches taken in other countries. The call for evidence closes on 30 August 2024.
Other announcements included:
The Treasury’s Fixing the foundations: public spending audit 2024/25 publication sets out details of immediate changes in response to the government’s initial public spending audit and also notes the following general commitments: ‘The government is committed to tackling tax non-compliance, including from fraud and tax avoidance, to ensure everyone pays their fair share. The government will increase HMRC’s compliance staff, invest in HMRC’s resources and technology infrastructure, and make legislative changes to tackle tax non-compliance and raise revenue.’
In a written statement summarising the tax changes, James Murray, Exchequer Secretary to the Treasury, also sets expectations for a bumper Budget in October: ‘The government will take a comprehensive approach to tackling the tax gap and making sure more of the tax revenues that are owed are correctly paid.
‘The government will invest in HMRC’s compliance work, hiring around 5,000 additional staff to recover more tax revenues. HMRC has already started the process of recruiting additional staff into compliance roles. The government will also invest in HMRC’s technology infrastructure, helping to make HMRC more efficient and improve taxpayers’ experience of interacting with HMRC.
‘‘The government will reform the tax system by making policy changes to simplify tax, close loopholes and reduce non-compliance, designing out non-compliance before it happens. At the Budget, the government will provide an update on the implementation and development of measures that form its plan to close the tax gap.
Both Houses of Parliament rose for the summer recess at the end of business on 30 July, and will return on Monday 2 September.
The Chancellor began her speech by explaining this was to be a statement on the state of public spending, and the position inherited from the previous government which, according to Reeves, included a projected overspend of £22bn and was ‘money they were spending this year and had no ability to pay for’. Reeves also contends that some projected spending had not been declared to the Office for Budget Responsibility. The OBR is to conduct a review into the information it was given ahead of the Spring 2024 Budget, and perhaps the Public Accounts Committee will have its interest piqued.
One of the headline announcements and ‘difficult decisions’ taken to mitigate against the in-year shortfall was to restrict the pensioner winter fuel payment to those in receipt of pension credit. ‘Not a decision I wanted to make,’ the Chancellor said.
Commenting on the Chancellor’s statement, Paul Johnson, Director of the Institute for Fiscal Studies, proposes that, although more money was always going to have to be found for Labour’s plans for public services, the extent of the in-year funding pressures seemed genuinely to be greater than could have been expected. Some of those pressures on public finances would already have been clear, however – for example, the likelihood of public sector pay awards needing to exceed the 2% that had been budgeted for.
But Johnson highlights a difficult question for the previous government: if the scale of overspend had been apparent last Spring, why did the then Chancellor proceed with a £10bn cut to NICs? ‘The new Chancellor is right to be cross’, Johnson said.
Chancellor Rachel Reeves has confirmed that she will deliver her first Budget on 30 October 2024.
In her speech to the House of Commons on 29 July 2024, reporting on the Treasury’s recent assessment of the state of public spending, the Chancellor also set out a number of tax commitments, including the following:
Draft legislation was published on:
There were policy announcements on:
A call for evidence was announced on the reform of the tax treatment of carried interest. The government is particularly interested in feedback on: (i) how the tax treatment of carried interest can most appropriately reflect its economic characteristics; (ii) what different structures and market practices there are with respect to carried interest; and (iii) what lessons that can be learned from approaches taken in other countries. The call for evidence closes on 30 August 2024.
Other announcements included:
The Treasury’s Fixing the foundations: public spending audit 2024/25 publication sets out details of immediate changes in response to the government’s initial public spending audit and also notes the following general commitments: ‘The government is committed to tackling tax non-compliance, including from fraud and tax avoidance, to ensure everyone pays their fair share. The government will increase HMRC’s compliance staff, invest in HMRC’s resources and technology infrastructure, and make legislative changes to tackle tax non-compliance and raise revenue.’
In a written statement summarising the tax changes, James Murray, Exchequer Secretary to the Treasury, also sets expectations for a bumper Budget in October: ‘The government will take a comprehensive approach to tackling the tax gap and making sure more of the tax revenues that are owed are correctly paid.
‘The government will invest in HMRC’s compliance work, hiring around 5,000 additional staff to recover more tax revenues. HMRC has already started the process of recruiting additional staff into compliance roles. The government will also invest in HMRC’s technology infrastructure, helping to make HMRC more efficient and improve taxpayers’ experience of interacting with HMRC.
‘‘The government will reform the tax system by making policy changes to simplify tax, close loopholes and reduce non-compliance, designing out non-compliance before it happens. At the Budget, the government will provide an update on the implementation and development of measures that form its plan to close the tax gap.
Both Houses of Parliament rose for the summer recess at the end of business on 30 July, and will return on Monday 2 September.
The Chancellor began her speech by explaining this was to be a statement on the state of public spending, and the position inherited from the previous government which, according to Reeves, included a projected overspend of £22bn and was ‘money they were spending this year and had no ability to pay for’. Reeves also contends that some projected spending had not been declared to the Office for Budget Responsibility. The OBR is to conduct a review into the information it was given ahead of the Spring 2024 Budget, and perhaps the Public Accounts Committee will have its interest piqued.
One of the headline announcements and ‘difficult decisions’ taken to mitigate against the in-year shortfall was to restrict the pensioner winter fuel payment to those in receipt of pension credit. ‘Not a decision I wanted to make,’ the Chancellor said.
Commenting on the Chancellor’s statement, Paul Johnson, Director of the Institute for Fiscal Studies, proposes that, although more money was always going to have to be found for Labour’s plans for public services, the extent of the in-year funding pressures seemed genuinely to be greater than could have been expected. Some of those pressures on public finances would already have been clear, however – for example, the likelihood of public sector pay awards needing to exceed the 2% that had been budgeted for.
But Johnson highlights a difficult question for the previous government: if the scale of overspend had been apparent last Spring, why did the then Chancellor proceed with a £10bn cut to NICs? ‘The new Chancellor is right to be cross’, Johnson said.
