Council tax is set to be frozen next year, softening the blow for plenty of expected tax rises and spending cuts. VAT is expected to go up, probably to about 20%, so petrol could go back up by about 2p per litre. Child tax credits could be removed from most families, though this is an area I don’t know that much about so I could be wrong on that one!
A big talking point has been the proposed rise on Capital Gains Tax. The current rate is 18%, but the Government want to raise to either 40-50%. So if you were to sell a property or business and make £1million profit, the tax rate you pay will go up from £180,00 to possibly £500,000. Now if your a guy with a big property or business portfolio, this is going to sting quite a bit. The worry here is that sales of bigger houses and businesses is going to slow, stagnating the market and stifling growth.
The country, and especially the public sector, is holding it’s breath for what is going to be announced on Tuesday. Expect pay freezes, pay cuts, job reductions disguised as ‘streamlining’, previous government projects scrapped, pensions freezes and pension reductions. Tomorrow is going to be a painful watch.