There may be little change to tax policy in the autumn statement but many Britons will still see their taxes increase, an expert has warned.
Daniel Abbott, from Hoxton Capital Management Advisory Group, said Chancellor Jeremy Hunt is unlikely to reduce any tax rates given current national debt levels, but people could still soon pay more tax.
He told Express.co.uk: “I expect the Chancellor to continue down the path of further stealth tax increases.
“While not directly increasing inheritance tax and income tax rates, freezing the nil rate band and Personal Allowance levels during a time of significant inflation is effectively doing just that but without the backlash that increasing actual rates would bring.
“I would expect to see similar tactics utilised going forward to increase the potential tax receipts, such as abolishing certain business reliefs.”
Mr Abott said the Chancellor may also move to clamp down on benefits claimants who “play the system” and refuse to work.
He commented: “I would not be surprised to see some kind of benefit reduction for long-term benefit claimants without a valid medical reason for not working or without valid evidence of actively seeking work.
“This would be akin to the bedroom tax that was introduced in previous years because of a housing shortage, despite many benefit claimants having properties with spare rooms that were paid for by the Government.”
He also warned the increase in benefits, which are set to go up 8.5 percent in line with inflation, may have to be reduced.
He explained this would be seen as working people being punished with frozen tax allowances while those on benefits are gifted a payment increase.
Turning to the triple lock, Mr Abbott said there may once again by temporary “amendments” to the state pension increase to make it affordable.
He explained: “Balancing ‘the give’ and ‘the take’ is something we have seen done quite well in recent budget announcements, such as ‘the take’ of freezing inheritance tax nil rate bands and income tax personal allowances but at the same time, ‘the give’ of abolishing the pension lifetime allowance and increasing the annual allowance.
“I would not be surprised to see a similar act this time round with regards to the triple lock; a significant reduction in the triple lock increase rate, which would primarily impact current retirees, but an announcement on a reduction or the abolition of IHT which is also most prevalent on the minds of retirees could be possible.”
Jamie Nice, director at accounting firm Rickard Luckin also told Express.co.uk the highly unpopular inheritance tax may soon be binned.
He said: “There have been strong suggestions that the Conservatives will look to win votes ahead of the election by removing inheritance tax altogether.
“Whilst this is unlikely to be announced in the autumn statement, the Chancellor might make the first step in that direction by reducing the rate at which inheritance tax is paid from the current level of 40 percent or by increasing the level at which a deceased’s beneficiaries start to pay inheritance tax (the nil rate band) from the current rate of £325,000.”
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