Accountants profit from Chancellor’s budget pessimism

The doom and gloom spilled by Rachel Reeves may have dampened confidence ahead of the budget, but it has proven to be a boon for accountants.

Figures from the Office for National Statistics (ONS) showed that the rush of businesses and households seeking advice ahead of likely tax rises was one of the main drivers of the economy over the summer.

The ONS said gross domestic product (GDP) rose 0.2 percent in August after two months of stagnation.

Some experts said it would have been stronger if not for the Chancellor belittling the economy and threatening to raise taxes.

But half of the growth came from so-called “professional, scientific and technical” activities.

Much of this was due to the 4.3 percent increase in “accounting, bookkeeping and auditing” output. That contributed 0.05 percentage points or about a quarter of the monthly growth.

Ashley Webb, British economist at Capital Economics, said: “That may have been because people and businesses organized their financial affairs ahead of potential tax rises in the Budget.”

Reeves’ warnings about tax rises have fueled fears he will target capital gains tax (CGT), pensions or inheritance tax.

An increase in CGT could affect owners of second homes or other assets in the UK. And the prospect of the overall tax-free limit on pension fund withdrawals being reduced has also prompted savers to seek advice.