As the Autumn Budget looms, many are wondering what the day will hold for them. With the government’s plans to ‘Build Back Better’, experts have predicted that this will be a Budget where the devil is in the details, and trending data shows that business owners are keeping a close eye on stealth tax changes.

In the run-up to October 27th, many will argue that the heavy lifting has already been done, with the raising of corporation tax to 25 percent in April 2023 and the increase of NIC and Dividends by 1.25 percent from April 2022 already announced, this upcoming Budget will likely be a technical one. It is predicted that within the announcement there will be many changes that impact business operations, meaning many will need help to navigate their way around the measures introduced to help rebuild the economy from the effects of the pandemic.

A recent poll conducted in the run-up to the Budget by national accountancy practice Haines Watts highlighted some the key issues that SME business owners most wanted to see addressed in the statement. Out of the respondents, 38 percent are hoping to see tax relief for SMEs addressed, 29 percent wish for countermeasures for inflation to be spoken on and 27 percent are hoping that funding for green initiatives are on the agenda.

Google search trends show a deeper look into business owners concerns. Within the heavily spiking ‘Autumn Budget 2021’ queries, trends have emerged revealing what business owners are truly concerned about, and the Partners at Haines Watts have outlined their predications for the speech at the end of October, and their advice on what should be top priority. However, they have warned the recent announcements on National Insurance outside of the traditional time frame indicate any forecasting must be treated with caution.

Capital Gains Tax (CGT) searches are up 50 percent since September, alongside ‘tax exemptions’ up 60 percent showing concern of changes to allowances which could impede on plans to sell assets. 

The rise of CGT has long been speculated. CGT is the tax payable on the profit made when you dispose of an asset. CGT is only payable on assets classified as “chargeable assets”, which include:

• Most personal possessions (worth over £6,000)

• A property that is not your main home

• Shares excluding those held in ISAs or PEPs

• Business assets

• Sale or gift of crypto assets (the use of cryptocurrency and bitcoin is far more widespread now, so it is worth checking on the tax implications if you are involved in this type of trading).

Martin Mann, head of OMB tax at Haines Watts said: “CGT is still many people’s top prediction for the Autumn Statement, but I think, although the rates may increase, they will not go so far to match income tax rates. It is more likely that we will see the Chancellor chip away at valuable reliefs and exemptions such as Business Asset Disposal Relief (BADR) or even Principal Private Residence Relief.

“What I am particularly concerned about is Inheritance Tax and Business Property Relief (BPR). This is an area where past Chancellors have left alone but it is a big opportunity to generate funds for the Exchequer.

“This might involve restricting the relief to those who hold a significant stake in the business or involve aligning the rules with BADR. This move is aimed at penalising the wealthiest of families, however such changes would also have a huge impact on business owners and those holding minority stakes. Adverse changes to BPR would certainly rethink a lot of tax planning and would be a real sting in the tail.”

Supply chain issues are front of mind for everyone as threats to supermarket shelves and warehouse stocks continue. Searches on supply chain issues in conjunction with the Autumn Budget have risen 86 percent this month.

Supply chain issues have arisen for a multitude of reasons, lockdown; Brexit; knock-on effect of the blockage of the Suez Canal and the lack of HGV drivers. Supplies have become increasingly difficult to source and costs are increasing for business owners.

Martin Gurney, partner at Haines Watts said: “There are lots of issues facing business owners, but possibly the biggest is the business disruption arising from supply chain issues. In my opinion, there is no single measure that will fix these issues in the short term; therefore, the Government needs to consider a raft of measures – further financial support for businesses while trading conditions remain challenging, and relaxation of immigration restrictions would certainly help.”

Research and Development (R&D) is another growing concern, with searches for R&D tax credit up 64 percent since the start of the month.

R&D tax relief can provide an important source of funding through cash reimbursement or tax deduction for companies developing products, processes, and services. It’s one of the biggest tax reliefs available to SMEs and can be worth up to 33.35% of a company’s R&D expenditure.

Steve Tobin, tax manager, at Haines Watts said: “R&D tax relief has been supported by successive Governments over a period of over 20 years now and I believe that they may be increased in the Autumn Budget. The current Government is committed to a “high wage, high skill, low tax economy”, which will take some years to achieve but further incentives for R&D businesses may be introduced to achieve this long-term goal.”

Although predictions have been made, experts have been cautious in cementing them due to the key policy changes announced outside of the Budget which have indicated that in the future, Budgets may not be the only source of information on significant changes.