Labour’s first autumn budget is scheduled for 30 October 2024, and expectations are high as the nation awaits potential tax rises for both individuals and businesses. Prime Minister Starmer and Chancellor Rachel Reeves have both set the tone, warning that this budget will likely “be painful”, with significant decisions necessary to address the country’s financial woes.

Treasury finances worse than expected

On 29 July 2024, Rachel Reeves, the Chancellor, released the Finance Bill clauses and issued a stark warning: the Treasury’s finances are in a worse state than previously anticipated. This revelation is not uncommon for a new government looking to secure more revenue to fulfil its manifesto promises. Similar tactics were employed by George Osborne during the coalition government in 2010, underscoring the challenge Labour faces in balancing its economic ambitions with fiscal realities.

Tax hikes on the horizon?

There is growing speculation that the 30 October Budget will include significant tax increases, particularly targeting high earners and businesses. With the Chancellor highlighting a £22 billion fiscal deficit, the government seems poised to implement measures that will ask those with the broadest shoulders to bear a heavier burden. These potential tax hikes have sparked concern across various sectors, as businesses and individuals brace for what’s to come.

Reflecting on labour’s promises

As we discussed in our previous article on the Labour government, this administration came into power with bold promises of change. However, the reality of governing has already tempered some of these ambitions. The upcoming Budget will be a critical moment, testing Labour’s ability to deliver on its pledges while managing the country’s economic challenges.

Follow bk plus for the latest updates and predictions on the upcoming budget. If you have any questions or need advice, don’t hesitate to get in contact with us today.