Interactive Investor

The ii Budget Panel: what you want from the chancellor on 27 October

22nd October 2021 15:03

Lee Wild from interactive investor

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We’re giving you a voice with our second interactive investor Budget Panel. Here’s what you have to say about Rishi Sunak’s next Budget.

The Budget on Wednesday 27 October will be a lively affair. There are plenty of rumours about what Chancellor Rishi Sunak might announce. You can watch our head of investment talk through them in the video above.

Will the chancellor look to raise taxes to pay for the furlough scheme and other costs linked to the pandemic?

If he does, how will he do it? Income tax rises, an attack on pensions, increases in capital gains tax (CGT) and inheritance tax (IHT).

Will he encourage more of us to go green with incentive schemes?  

Following the success of our inaugural Budget Panel in March, we have again asked interactive investor customers what changes they wanted the chancellor to make.

If you're an interactive investor customer and would like to be featured in our post-Budget Panel, please send your name and contact details to editorial@ii.co.uk.

Tony Jackson, semi-retired academic economist, University of Dundee

The chancellor will have to steer a careful path in his forthcoming Budget, taking into account the various pressures on the economy from the pandemic recovery. His projections of economic growth over the following 12 months will provide an idea of the room he has for funding new initiatives without raising taxes.

Should projected revenues permit this, I would like to see some extra funding beyond current announcements for the care sector, and a possible proposal to integrate care facilities into the NHS over the next few years. Should this prove infeasible, then it is vital that funding for local authorities is raised to accommodate adequate resource provision for the care sector.

Any attempt to reduce business rates would militate against the above objectives, so I don’t want to see this. In Scotland, the basic rate of income tax is already 1% above that for England, so if the chancellor has to raise taxes, it makes sense simply to add an extra 1% on the basic rate in England.

Following on from COP26 in Glasgow, there will be a temptation to seek new green taxes. However, many such tax bases are still difficult to evaluate, and I consider that this is not the time to seek further government revenue from domestic energy usage, or to try to promote a large shift in domestic energy usage through differential taxation on gas and electricity consumption by domestic households. If the chancellor wishes to explore ‘green’ incentives at this stage, then the business sector would be the place to start.

Recent research suggests that the London Stock Exchange is losing business to other stock exchanges. It would be helpful if the chancellor announced a review of LSE arrangements to open up the UK market to more IPOs and other sources of investment income.

Tony Clish, near Beaconsfield, Buckinghamshire

What policy announcements do you want to see in the Budget on 27 October and why?

An overall raising of tax revenue to start to balance the books.

Redistribution of wealth, from older people with non-earned income and high net worth individuals, to younger people struggling to cope with increasing inflation and a property market they can’t afford to buy into. The pension triple lock is too generous and not sustainable, it should be revised beyond the current tweak. Inheritance tax (IHT) relief is also too generous.

We need an increase in capital gains tax (CGT), and the removal or reduction of entrepreneurs' relief. I don't believe we can afford to reward success so generously with tax breaks. The chancellor should also encourage people to sell property they no longer want, and the second home CGT premium should be reduced or removed. The buy-to-let market has already been effectively killed by numerous tax changes - these properties would be better sold to first-time buyers. 

The productivity of the UK economy must improve. Mobility of labour is a key factor so people can move and add greater economic value in new roles. Current levels of property stamp duty are a huge barrier to mobility and an efficient labour market. One change could be to only pay stamp duty on the increase in price of the property being bought. If you move into a house of the same value or less, no stamp duty would be paid. So older people downsizing would pay no stamp duty. 

We need some stick and carrot to encourage environmental responsibility, such as taxing the use of virgin raw materials rather than them being recycled. Greater producer responsibility for end-of-life impact of their products via taxation if there isn’t a paid return recycling scheme or an enhanced life repair scheme. I'd also like to see incentives for repair businesses to move us away from the throwaway culture. 

There should be greater taxation on aviation. It is criminal that fuel for aviation isn’t taxed and fuel for other use is taxed so highly. 

Incentives to reduce ‘food miles’ and ‘product miles’. If ever there was a time for ‘buy British’ it is now. It reduces transport issues, boosts the economy and is in line with the Brexit political ethos.

Simon Nicholson, Amersham, Bucks

What policy announcements do you want to see in the Budget on 27 October and why?

I strongly want to see measured steps towards national debt reduction. I believe not enough people pay meaningful amounts of tax. 'The Rich' and businesses mathematically can't provide the tax revenue required. A 2% increase in VAT for two years is the fairest way to raise the money to pay for Covid and give the message that everyone should contribute. I also think it is really important to tackle pension taxation arrangements, that is, limit tax relief and raise/abolish the lifetime limit.

What policy announcements don’t you want to see in the Budget on 27 October and why?

I don't want to see any more complicating stealth taxes. Let's have straightforward honest government.

Mark Cortacans

What policy announcements do you want to see in the Budget on 27 October and why?
 
I would like to see the chancellor increase the Lifetime Allowance for pensions – it seems unfair to punish good investment performance with additional taxation. He should also increase the ISA allowance to compensate shareholders for the continuing onslaught of taxation on dividend income. Stop overtaxing savers.
 
Some increase in personal allowances would be a great incentive to work rather than claim benefits. 
 
What policy announcements don’t you want to see in the Budget on 27 October and why?
 
Further taxation on investment income – savers have been hammered in recent years. Surely the government can learn to live within its means. It will cause long-term damage to the economy. 
 
Cuts in tax relief for technology or other high-risk growth areas, because a vibrant economy is what we need most of all, with less rather than more government intervention. 

David Halliday

What policy announcements do you want to see in the Budget on 27 October and why?

I'd like to see a tax on canned meat and industrial meat products. These products are having a serious effect on the rainforests and are usually imported and have few health benefits. I'd also welcome a tax on timber, particularly hardwoods, to reduce demand, increase recycling and give our forests and wildlife a chance to recover.

I'd like to see VAT added to takeaway foods and delivery to create a level playing field between pubs and restaurants and to raise revenue, and a packaging tax to reduce the tax advantage of foreign imports/international companies, which have made local goods more expensive and led to the closure of British companies.

I'd also welcome: targeted taxation for a specific benefit, for example, 2% extra for the NHS; a basic £100 road tax for all vehicles to pay for urgent road repairs; and, finally, a raw materials tax to raise substantial tax revenue to replace that lost/due to be lost from fuel/shop rates and pub sales.

Michael Stevens 

What policy announcements do you want to see in the Budget on 27 October and why?

I'd like to see an increase in fuel duty of 5p per litre. People do not drive economically, buying highly inefficient large SUV,s which are carbon producers. Also, increase road tax for cars with an engine larger than two litres.

What policy announcements don’t you want to see in the Budget on 27 October and why?

Please do not increase the 20% income tax rate.

 

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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