10 days ago, we woke up to a Country that had seen the first major change of government in 14 years. Keir Starmer’s Labour Party had won a landslide victory, winning 411 seats, to the Conservatives’ 121, almost 2/3 (63%) of the total seats in the House of Commons.

Whilst Rachel Reeves has indicated that she does not intend to raise the rates of any of the “main” taxes (Income Tax, National Insurance, VAT & Corporation Tax), in reality we will also see the tax free allowances being frozen until at least April 2028 – meaning that inflation will increase the burden of taxation in real terms, with more people paying more tax, and a higher proportion of income being in higher tax bands.

On Corporation Tax, while it has been confirmed that the main rate of 25% will remain unchanged, it has not been confirmed that there will be no changes to the small profits (under £50,000) rate of 19%, or the sliding scale relief for companies with profits between £50,000 and £250,000.

We can expect to see other “small” changes (perhaps “small” to small business owners in the same way as the Liz Truss / Kwasi Kwarteng “mini” budget was “mini” in effect!) For instance the Dividend allowance has already been reduced over the last decade from £5,000 up to 2017/18, to just £500 for 2024/25.

Labour made no promises on Capital Gains Tax in its manifesto, although Keir Starmer did confirm during the campaign that selling a main home would not attract CGT. Consistent refusals by Keir Starmer and other Labour MPs to rule out raising CGT has led to speculation that this could be increased. The same speculation applies to Inheritance Tax, where there is speculation that currently available reliefs may be reduced or removed entirely. One thing that has been confirmed is an increase in the Stamp Duty Land Tax surcharge paid by non-UK residents from 2% to 3%.

One of Labour’s most prominent announcements in the run up to the election was to end the VAT exemption for private schools. While it was announced as being implemented “straight away” Reeves has since confirmed that the change would be made in Labour’s first budget and not retrospectively applied. While this would allow for its implementation from January 2025, it’s more likely that the change will be applied for the 2025-26 academic year. It has been reported that Labour intend to try and retrospectively tax advanced payments. It is not clear how this would be possible under current VAT law principles.

One piece of good news from the current uncertainty, is that Labour have committed to “one major fiscal event a year, giving families and businesses due warning of tax and spending policies”. Based on this and an earlier statement that there would be “One Budget every autumn, at least four months before the new tax year”, we are expecting major announcements only once a year and in good time to plan accordingly.

Suffice to say, that the second half of 2024 is likely to be interesting in terms of announcements and we can only wait and see what may be confirmed in the coming months, however a change of thinking an planning is likely to be needed.