“Equally, while a change such as imposing employer national insurance contributions on high level pension contributions could be easier, it will nonetheless be hard for a government so focused on growth to justify raising costs for employers.”
Peripheral measures
Aside from CGT, IHT and pensions tax relief, Robert Salter, a director at Blick Rothenberg, says there are plenty of areas “around the edges” where taxpayers could be squeezed.
“While they won't, say, increase national insurance contributions on your standard salary or self-employed profits, because they said they won’t, if you take them at face value, how else can they do it? There's ways around the edges.
“They could do things like expand national insurance contributions to new areas. For example, could you have national insurance contributions on dividend income, or could you have [contributions] on letting income? I think those sorts of things are relatively easy to introduce.”
Indeed, as to whether taxpayers can expect the Budget to bring major changes to a select number of taxes, or smaller changes to a large number of taxes, Salter believes it will be “a bit of both”.
“I think the Budget will have one or two quite significant changes. Whether they change them as of October 30, or whether they just announce a future change, I think is a bit of an unknown.”
Salter adds: “I do think they'll definitely tax around the edges; so whether it's things like benefits in kind becoming more expensive for the employee, whether it's things like national insurance contributions being expanded in terms of its scope, whether it's, say, taxing something that we don't presently tax, like lottery winnings, I can easily see those being kind of relatively easy wins for the government.
“Each individually probably won't make billions; but together, you may get some of the £22bn that they claim to be missing.”
Chloe Cheung is a senior features writer at FT Adviser
