When Will the New Government Deliver its First Budget?

Labour announced back in February that, if elected, they would commit to an annual budget in the final two weeks of November. However, considering that the general election has already concluded, an autumn budget now seems impractical. So, the first fiscal event might occur earlier than you think.

Labour pledged in its manifesto that its crucial fiscal events will be independently forecasted by the Office of Budget Responsibility (OBR). Considering the Parliament’s summer recess and the need for OBR reviews, the earliest date appears to be mid-September. The early announcement of the fiscal budget will set the stage for Labour’s tax policy direction.

What Tax Changes Is the Government Proposing?

Labour focused on improving the housing market of the UK and making the tax system more transparent and fairer in their manifesto. So, one can assume that that is what they will focus on in their budget as well.

Here are the key tax changes proposed by Labour:

• SDLT rate for non-residents – Increasing the Stamp Duty Land Tax (SDLT) rate for non-residents by 1%. So, non-residents have to pay a 3% SDLT surcharge on residential property purchases in England and Northern.
• Building new houses – Labour plans to build 1.5 million new houses by the end of their term to target the housing crisis and affordability problems.
• Charging VAT on private school fees – The government has plans to impose VAT on private school fees to make the system fairer and increase government revenue.
• Closing loopholes in windfall tax – The plans are to make regulations for windfall taxes, such as oil and gas companies, stricter to close loopholes.
• Roadmap for Business Taxation – Labour plans to publish a roadmap for business taxation within the first six months. This aims to provide businesses with a clear plan to help with long-term investment decisions.

Conclusion

The new government's ambitious tax agenda seeks to make the tax system fairer and simpler. By addressing important challenges and committing to significant reforms, the new administration intends to create a more equal environment for both enterprises and citizens. As the first fiscal event approaches, all eyes will be on Chancellor Rachel Reeves and her team to see how these plans will play out and affect the UK's economic landscape.