What does Liz Truss face next? The monumentally emotional and historic events of the past week, precedes the next important issue to be faced by the new PM – whether to hold an emergency budget, now rumoured for the 23 September.
Emergency Budgets are usually focused on one particular issue and the cost of living crisis and exorbitant energy prices are expected to be the dominant focus.
The recent Energy Price Guarantee announcement is likely to be the first in a number of measures designed to tackle the crisis.
What could be announced?
The new PM’s recent campaign provide the clues to her focus and that of the Chancellor;
A repeated commitment to reverse the April 2022 NIC increase for individuals and employers seems highly likely to happen. This could see a reduction of 1.25% in NIC costs.
It appears the PM is in favour of reducing corporation tax and getting rid of the increase planned for April 2023. This could see CT rates remain at 19% as opposed to a gradual increase to 25%.
Reversing the planned CT increase could see the super deduction allowed to continue beyond April 2023.
VAT and Business Rates
The voting record of Liz Truss shows that VAT is in her sights and she may opt to cut VAT. Similarly, cuts to business rates are anticipated.
Personal Tax Allowances
If the rumours are to be believed, personal tax allowances and transfer of spousal allowances may be extended and relaxed.
In the longer term, to avoid repeated sticking plaster solutions, scaling up of renewable energy has to become a reality. Russia can only be blamed for so long for the rising costs from our dependency on fossil fuels.
Our tax teams will endeavour to keep you up to date with announcements to guide you through these difficult times.