A change of direction in tax policy?
The Government is expected to make a fiscal statement on 23 September; what might it include on tax?
The Government is expected to make a fiscal statement on 23 September; what might
From the start of her campaign the new Prime Minister, Elizabeth Truss, announced there would be some form of fiscal event in September if she won. However, her appointment was quickly overshadowed by the tragic passing of Queen Elizabeth II which has resulted in a suspension of most parliamentary activity. A fiscal announcement is now expected on 23 September 2022 and, although it is likely to contain much less detail than a full ‘emergency Budget’, it should still provide the headlines on the key fiscal policies the Government is planning to implement. This article discusses what tax announcements we might expect to see and also explains how to find our commentary on the day.
No one can deny the difficult fiscal and economic challenges the Government faces. Spiralling energy prices and inflation have produced a cost-of-living crisis not seen for decades. Other economic and societal issues have not gone away. These include an ageing population and its associated pressures on the NHS and social care, climate change and the challenge of meeting net zero, and ongoing geographical inequalities.
A Truss-led Conservative Government could represent a major change in policy direction from the previous Johnson/Sunak partnership, with the more Thatcherite instincts of Truss and her new Chancellor Kwasi Kwarteng potentially at odds with the populist and Keynesian shift of the party over the last few years. Under Sunak’s Chancellorship, we saw a more interventionist approach coupled with generally higher taxes. The new Prime Minister was elected on a platform of deep (and expensive) tax cuts, coupled with regulatory loosening. Few would question the need for the Government to step in and help with the current energy crisis, but beyond this, the new ideology seems to be one of a smaller state.
In a new blog post Tim Sarson, UK Head of Tax Policy and Sharon Baynham, Director, Tax Policy, KPMG in the UK, discuss this further and set out their expectations of what may or may not be in the fiscal announcement.
On the day we are planning to hold a LinkedIn Live event in the afternoon to talk through the tax announcements and economic backdrop. Please follow KPMG UK on LinkedIn for further details of this event and please also follow Tim Sarson on LinkedIn for further written commentary on the day.