Business owners and directors need to take important decisions sooner rather than later
The Prime Minister has used a rare speech ahead of the return of Parliament to warn that the October Budget “is going to be painful”.
Speaking in the Rose Garden of Downing Street behind a lectern with the slogan “Fixing the Foundations” he said: “I will be honest with you, there is a budget coming in October and it’s going to be painful.
“Just as when I responded to the riots, I’ll have to turn to the country and make big asks of you as well to accept short term pain for long term good. The difficult trade-off for the genuine solution.”
Chancellor Rachel Reeves already announced that her first Budget on October 30th would aim to “fix the foundations of the economy” and this theme was reiterated by the Prime Minister today that his government had inherited a “black hole” in public finances and that repairing it meant that “things will get worse before they get better.”
Sir Keir said they had been left with “no other choice, given the situation that we’re in” further signalling that “those with the broadest shoulders should bear the heavier burden, and that’s why we’re cracking down on non-doms”.
He added that “those who made the mess should have to do their bit to clean it up.”
Asked in terms of tax rises Starmer reiterated the manifesto pledge that income tax, VAT and national insurance would not be raised but interestingly said: “We have to get away from this idea that the only levers that can be pulled are more taxes or more spending.
“Our number one mission is to grow the economy.”
CGT RIP?
Chris Horner, insolvency director with BusinessRescueExpert, said: “The personal intervention by the Prime Minister is the most visible signal yet that there will be some financial upheaval in October’s budget.
“Which also further informs our own opinion that capital gains tax (CGT) and potentially business asset disposal relief (BADR) are going to change or in the latter case, even be discontinued or replaced.
“We’ve looked at the history and development of CGT over the past few weeks along with our analysis of what changes the Chancellor could potentially make to both.
“While none of us will know precisely what changes are coming before she steps up to the dispatch box for the first time on October 30th, we do know that there will be some.
“This is why it’s imperative that entrepreneurs and directors who are looking to maximise the available benefits of closing their solvent businesses through an MVL should act sooner rather than later.
“We offer a free initial consultation where we can discuss the various viable options with them depending on their goals and their aims in the short and medium term.
“The drumbeat of announcements only underlines that moving these medium term ambitions to the short term and implementing them might be the smart move as we head into the final third of 2024.”