There appears to be an unprecedented amount of Budget speculation.
Money Marketing is asking whether the threat of a big hike in capital gains tax in the Budget is also mixed up with the review of consolidation.
As the website puts in – “the Financial Conduct Authority (FCA) is remaining tight-lipped over the timing of its recently announced review of consolidation in the advice sector”.
On 7 October, the regulator unveiled plans to examine consolidation, emphasising the need for strict approval processes when firms acquire or increase control over other regulated entities.
MM writes that despite speculation that the review may have been prompted by concerns over rushed deals ahead of potential capital gains tax (CGT) changes, the FCA declined to confirm or deny this.
Could this make sense? Well, perhaps although frankly things sound at little feverish at the Treasury and just about everything is being second guessed.
Of course, the story riffs off other coverage across the national papers. This is the usually supportive Guardian reporting the potential for a huge CGT hike - Rachel Reeves considers raising capital gains tax to 39%.
We have to say this story feels like quite a stretch and some commentators on social media have suggested it would be fiscally self-defeating as well.
But as the Guardian has it - “Treasury modelling being reviewed by the chancellor and seen by this newspaper shows officials are testing a range of 33% to 39% for capital gains tax (CGT).”
Someone is briefing chaos – and again to emphasis this is in a relatively Labour friendly newspaper - "“Some very big tax decisions are being left until very late in the day,” one senior source claimed. Another said the Treasury’s tax-raising plans were in “complete disarray”."
The report also notes fears that non-dom and IHT reforms potentially look set to cost the Treasury money if pursued.
And as further context it mentions the assertion by the Institute for Fiscal Studies that the government needs £25bn in tax rises to repair public services again making big news in the Guardian.
So what about the Conservative leaning papers?
Well, the Telegraph spent much of last week warning about government designs on tax free cash being limited in the Budget with this headline Rachel Reeves considers capping tax-free pension lump sum.
I do wonder about the provenance of some of these stories. Clearly there is a crisis in public services in the UK, the Treasury is strapped for cash and Labour has promised not to raise main taxes. But I do wonder if there’s a difference between officials running some calculations and the realistic prospect of action.
Have to say, this story from New Model Adviser feels better sourced because at least the conversations have clearly happened because someone at the Treasury has been asking providers about practicalities as in the Treasury eyes NI on pension contributions in provider talks.
There has been a direct impact on financial advisers in the form of worried clients which New Model Adviser also reflects adviser frustration with this story - ‘Absolutely awful’: Advisers call for clarity over tax-free lump sum.
Clearly, the Chancellor Rachel Reeves has not been dealt a very good hand. Being kind, she also inherited plans to cut National Insurance (though pre-election she didn’t have to accept them) and wildly unrealistic spending plans from her predecessor. However, people briefing from inside government or even the civil service, should probably be moved outside government sharpish.
But even with a hostile press, hungry for clicks, where it is testing the definition of words like consider, plans, models etc, this has been a comms nightmare.
Perhaps we need return to good old fashioned Budget purdah? Indeed AccountingWeb argued this only last year, referencing Hugh Dalton, Chancellor in the late 1940s who resigned because he gave away one line of the Budget, minutes before he gave the Budget speech. Those were the days!
