What To Expect In Tomorrow's Emergency Summer Budget

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July 13th 2020
Tax Week 15
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What To Expect In Tomorrow's Emergency Summer Budget

Welfare cuts, pension relief changes and updates to CGT. What else is rumoured for tomorrow?

Tomorrow marks the first chance for the Chancellor to deliver a budget without hinderance on policies. We already know that in order to cut the deficit and reach the deadline to balance the books huge cuts are to be made in areas such as welfare. Cuts in Tax Credits for under-25s and lowering further of the benefit cap are pretty much guaranteed with the number of reported leaks. However in contrast, there have also been noises of putting through changes such as lowering the top tax rate further, introduced first by Labour at 50 percent then reduced to 45 percent by the Coalition. We'll see how that one goes down with the majority of the population.

Tax reliefs on pension contributions are always been discussed prior to recent budgets but have never really been heavily tampered with - maybe higher rate reliefs will get squeezed this time round?

The personal allowance is already planned to reach £12,500 by 2020, along with increasing the higher rate tax threshold to £50,000 of gross income.The timeline for these changes may be adjusted.

Capital gains tax is currently charged at 18 or 28 percent depending upon the marginal rate of the taxpayer - could this be aligned with the income tax rates of 20 and 40 percent? CGT is not alien to drastic changes. Prior to 2010, all gains were taxed at 18 percent.

Bank levies brought in to punish the City institutions have seen a lot of threats, for instance HSBC moving away from the UK - maybe the Chancellor will reduce the levy from 0.21 percent to appease the banks?

The Olympics back in 2012 saw the Sunday Trading Law relaxed for a number of weeks. It was originally sought by the Tories to increase allowed working hours on Sundays permanently, but this was vetoed. There are whistles of the original objective being pushed into force tomorrow under the argument that thousands of extra jobs will be created with the resultant increased income.

Inheritance tax allowance changes may result in the ability for couples to bequeath a £1 million estate with no tax burden on the beneficiary. That's an increase in the allowance of £350,000 for a couple.

Catch up with all the announcements right here tomorrow, follow us on twitter @uktaxcalculator or search for hashtag #summerbudget or #budget2015.

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