The Budget will follow the Spending Review and is expected to set out how the government will deliver on its promises to the British public. These include leading the transition to net zero across the country; ensuring strong and innovative public services; levelling up across the UK to increase and spread opportunity; and delivering its Plan for Growth.
Here, we take a look at what the Chancellor may have in store in the Autumn Budget.
The UK's trajectory
The Confederation of British Industry (CBI) says the decisions made this autumn at the Budget and Spending Review will 'define the UK's trajectory for the decade ahead'. These will bring an opportunity to generate higher investment and growth with lower carbon emissions and provide UK leadership in new markets.
According to the CBI, corporate cash reserves are now over £900 billion, creating 'a wall of investment waiting to be invested'. However, it says the government must create the right environment to unleash it.
The CBI's recommendations
Smart taxation that rewards investment:
- 'Greening' the tax system and pledging no further increases to the business tax burden to safeguard UK status as a leader in attracting global investment
- Introduce full expensing for capital expenditure beyond 2023 and targeted 'green' investment-focused capital allowance mechanisms
- Reform outdated business rates to reflect green ambitions and reward decarbonisation efforts
- Boost the structures and buildings allowance to incentivise sustainable construction
New skills for new markets:
- Turn the Apprenticeship Levy into a Lifelong Learning Levy to unlock business investment in training
- Turn Job Centres into regionally autonomous Jobs and Skills Hubs to encourage more people to take up lifelong learning and enable closer alignment with changing local jobs markets
- Introduce individual training accounts for unemployed individuals
- Address skills shortages by removing barriers to recruitment
Catalytic public investment:
- Prioritise the UK establishing itself in new and emerging markets by speeding up the development of major infrastructure projects, new industries, and cutting-edge tech
- Designate energy efficiency and heat as a national infrastructure priority
- Provide long-term funding to decarbonise UK transport systems and develop a UK electric vehicle market
- Commit to a new Gigafactory plan to deliver increased capacity by 2040
Government as market maker:
- Deliver on commitments to invest £22 billion in direct domestic R&D funding by 2025
- Grow investment in business-led innovation, while requiring regulators to prioritise innovation, net zero and investment as part of core remits
The CBI says the Autumn Budget is a once-in-a-generation opportunity to change the UK's productivity and growth trajectory, so the government must do what it takes to rapidly unlock private sector investment.
However, failure to act will impact the UK's recovery and ability to level-up. In addition, inaction risks seeing the UK fall behind competitors, lose international investment, and miss out on its global commitments on net zero.
So, all eyes will be on the Chancellor on 27 October to see what he delivers.
How we can help?
The Budget may bring significant changes to the taxation system or bring new opportunities for investment. As your accountants we can help your business through these changes: please contact us.