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There is a budget coming in October, and it's going to be painful
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I'll have to turn to the country and make big asks of you as well
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to accept short-term pain for long-term good. That was the warning from Prime Minister's Sirky Astana on Tuesday
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ahead of the new government's autumn budget. The Prime Minister's cautioned that public finances were worse than we ever imagined
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comes after Chancellor Rachel Reeves already said she thinks taxes will go up
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So where will Stama and Reeves turn to make some extra cash
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Well, firstly, capital gains tax could be raised in line with income tax
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The Chancellor has said she has no plans to do so, but has not explicitly ruled out such a measure
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Capital gains tax is imposed on the profit resulting from the sale of capital assets
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However, there are widespread concerns about the potential knock-on effects of hiking capital gains tax
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particularly with the UK's entrepreneurial landscape. Secondly, Rachel Reeves could reduce the extent of tax reliefs on pension contributions
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A report released by the Fabian Society outlined a number of options which could raise around £10 billion per year
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One of the measures they argue would create a fairer system is cutting the amount pensioners are able to
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withdraw from their pension pots without paying tax. The think tank also suggested that pensions
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should be subject to inheritance tax and that there should be a flat rate of relief on contributions
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Currently pension contributions are tax deductible with the extent of tax relief depending on someone marginal tax rate Another way the government could raise some cash is by reforming council tax Council tax bans are based on property valuations taken back in 1991
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which the Institute for Fiscal Studies said is increasingly absurd. Since 1991, house prices have changed dramatically and unevenly across the country
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An IFS report suggests that the average price in London is now more than six times what it was in 1995
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compared with barely three times that in the northeast. In effect, this means households in the Midlands and in the North are in a too high a band
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while households in the capital are in a too lower band. And lastly, the government could wrangle some more money by abolishing or reforming inheritance tax
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Currently, inheritance tax stands at 40% and is paid on estates worth £325,000
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However, there are a range of exemptions which means only 5% of deaths are taxed and often at a much lower effective rate
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Under the current rules, savings kept in defined contribution pension pots can be passed on tax-free and agricultural land can also be passed on without paying any tax
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The IFS has argued that the government could raise an extra $4 billion by closing these
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loopholes in the inheritance tax system. Here at Cityam, we would like to know what are your thoughts on the upcoming budget, and are you
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worried about what it might mean for you? Let us know your thoughts in the comments
