When will 17th November budget changes take effect?

Maffo65

Would the changes apply to the current tax year, or to the one starting on April 5th, 2023 ?

Obviously we don't know the details yet, but there are plenty of rumours flying around.

Personally, I'm concerned about possible changes to pension contribution relief rules and I'm wondering when these would kick in, if implemented.

Thanks for any insight you may be able to provide.

[Deleted User]

No-one apart from the chancellor, PM and the treasury would have any idea. The rumours are just that, rumours.

Jeremy535897

The usual approach is that things that need immediate attention (like closing loopholes) take effect from the day of the announcement. Changes that affect income tax rates tend to take effect from the following 6 April, because income tax affects income throughout the year, and so raising income tax rates part way through the year could have an element of retrospection, and it is messy.

If you are worried about pension contributions specifically, then if you have the funds and are going to make the contribution anyway, do it before 17 November.

[Deleted User]

Hi,

it won't happen overnight, so you should have time to plan.

Albermarle

There has been some debate on the pensions board on the subject of potential changes to pension tax relief, salary sacrifice etc The general conclusion being that rumoured changes in pension contributions rules, would be difficult to implement full stop, never mind overnight or even in 23/24. However with a lot of potential savings at stake, they may find a way, or maybe announce a review .
Pension tax relief — MoneySavingExpert Forum

hoc

Pension management is too complex and decision horizon too long for administrators and contributors for an immediate change. Depending on the change, an "immediate change" could mean a "retroactive change" which is avoided/unprecedented, to work around it would then require temporary loosening of rules e.g. contribution refunds which would be a nightmare. Announcing changes to pension rules effective next tax year would be a very aggressive challenge, 5 months really isn't a long time, this isn't a simple change like playing with stamp duty or even VAT.

diystarter7

frugalmacdugal said:

Hi,

it won't happen overnight, so you should have time to plan.

True but could happen quickly but I doubt before April 2023 re any major tax changes/implications. However, no one knows and not even rishi Sunak is certain about anything ATM.

sheramber

We will know on 17th November anything else is guesswork.

Jeremy535897

It is logical to work on the basis that nothing is going to get better, so if you were going to do it anyway (like making pension contributions) and can afford to, do it before17 November rather than on or after 17 November.

Pennywise

Jeremy535897 said:

It is logical to work on the basis that nothing is going to get better, so if you were going to do it anyway (like making pension contributions) and can afford to, do it before17 November rather than on or after 17 November.

I fully agree.  I've been telling my clients who are likely to have any capital gains from selling property, shares, etc in the very near future, to sell sooner rather than later, i.e. before 17 November if possible rather than the few weeks after.  Likewise, been pushing clients who usually make lump sum pension contributions in March, to do it now, before 17 November.  I've stressed that clients shouldn't take action they wouldn't otherwise do, but only to bring things forward to have the certainty, rather than wait a few weeks or months, for no good reason and take the risk.

I've likewise been suggesting to clients with loss making capital assets to delay selling them as if CGT rates rise or the annual exemption is halved as is being suggested, a capital loss under the new changes will be worth more than a capital loss under current rates/rules as they can set it against profit making assets which would otherwise be taxed more heavily.

Grumpy_chap

The speculation ahead of a fiscal statement is always rather futile and I rather suspect there will be less advance briefing that has been the case in recent times.

One possible change that has been mentioned in some press is to reduce the threshold for 45% income tax from £150k to £125k, which would presumably come into force from April.  I actually think, if there were to be changes in that kind of fashion, it would make more sense to bring in the 45% rate from £100k but do away with the tapered-withdrawal of the personal allowance.  This would at least avoid the distortions that drive behaviours to avoid the effective >60% tax rate.  It might mean that tax take increases or the level of the 45% could be adjusted to compensate.