“This budget is certainly big and bold – but it asks business to do most of the heavy lifting. It is good though to see the Chancellor use the occasion to set out some important decisions for the long term.
“We’re pleased the government has committed to a corporate tax roadmap, to changing the debt rules and to further investment in making HMRC fit for purpose – all things we have called for in the run up to the budget. These measures will provide businesses with clarity and stability, and remove barriers to much-needed investment.
“However, there’s still plenty of work to do. The government must spare no effort in making it easier to start, run and scale-up a business in the UK, to incentivise investment and boost the resilience of the economy.
“We look forward to working closely with the government to help them deliver on their ambition to unlock economic growth.”
Suren Thiru, Economics Director at ICAEW, also responded to today’s Autumn Budget:
“The OBR’s latest outlook offers an underwhelming view of the UK economy with slight downgrades to their GDP projections from 2026. Tax rises on businesses combined with poor productivity could mean that growth is shallower than the OBR is expecting.
“While these tax hikes announced could undermine the government’s growth mission, the ultimate test for this budget will be whether the long overdue boost to investment can significantly increase productivity and living standards over the long term.
“Though a November interest rate cut looks nailed on, the upward pressure on inflation from the notably higher business costs resulting from some of the measures announced may mean that policy is loosened more slowly than expected.”
Frank Haskew, ICAEW Head of Tax, responded to the tax measures announced in today’s Autumn Budget:
“The additional cost for employers as a result of the rise of employers’ NIC increases the incentive for workers to be treated as not employed and therefore more workers may be hired off payroll.
“To discourage employment status arbitrage and reduce distortive behaviours, the taxation of labour needs to be more consistent across all forms of engagement.
“The extension of Making Tax Digital for income tax to those with gross income above £20,000 by the end of the Parliament appears premature when there is still so much to be done to deliver it for those on higher incomes from 2026 and 2027.
“While we support digitalisation of the tax system and record keeping, we remain of the view that quarterly reporting will result in significant costs and administrative burdens for taxpayers in return for limited benefit to HMRC.”
Alison Ring, ICAEW Director for Public Sector and Taxation, responded to the public sector measures announced in today’s Autumn Budget:
“Chancellor Rachel Reeves used her first Budget to upgrade the medium-term outlook for the public finances from ‘weak’ to ‘fragile’, raising taxes over the next five years to avoid the austerity that was embedded into the spending plans she inherited from the previous government.
“As expected, borrowing will be higher following the change in the Chancellor’s debt rule, which we were pleased to see given that it increases her ability to invest, as we had called for. The Chancellor’s ‘stability rule’ will limit the amount she can put into raising public investment, so the government must get a grip on major capital expenditure programmes to get value for money.
“Despite the extra money for both day-to-day spending and public investment, budgets will remain tight with some very difficult choices still to be made in next year’s Spending Review. The Chancellor will also be aware that there remains a lot more to do over the course of the Parliament to address the long-term fiscal challenges facing the UK.”
Ed Saltmarsh, ICAEW Technical Manager, VAT and Customs, responded to the updates relating to VAT on private schools announced in today's Autumn Budget:
“It’s helpful that the government has updated the draft legislation to clarify the position in several areas, as we have called for. Nursery classes will now remain exempt from VAT if they are wholly or almost wholly comprised of children under compulsory school age, while higher and further education colleges have also been explicitly excluded. This has brought much-needed certainty to colleges, universities and schools that were unsure of their position.
“Nevertheless, we remain disappointed that the government has confirmed that it will introduce VAT on private school fees from 1 January 2025, as we think it doesn’t allow sufficient time for these schools to prepare for all the possible consequences and places an unnecessary burden on HMRC.
“We hope the government and HMRC continue to work with us and other interested parties to improve the legislation and guidance where required.”
ENDS
Notes to editors:
Contact: ICAEW media office media.office@icaew.com, tom.mackintosh@icaew.com or 07866 853 841