Budget 2018: Brewin Dolphin's top five predictions

With Brexit looming and the public increasingly seduced by the most leftwing Labour platform in decades, how many rabbits does chancellor Philip Hammond have in his hat for this year's budget?

We share five predictions from Liz Alley, the divisional director of financial planning at Brewin Dolphin.

Tax hikes likely

The government needs to find an extra £20 billion to cover the funding pledges that it has made to the NHS over the next five years.

We think that will require raising tax revenues through a combination of tax hikes and axing (or reducing) various tax breaks.

Tax relief targeted

It is widely believed that pensions tax relief along with other tax-efficient investments and thresholds will be high on the list of cost-saving targets.

All of which means that almost all savers and investors are in the government’s sights for one reason or another.

Pension withdrawals safe

It is a possibility that the chancellor will abolish the 25% tax-free lump sum that can be withdrawn from your pension fund at age 55, but we think this is unlikely for two reasons.

Firstly, it would remove all of the tax benefits on pension withdrawals and push more savers towards ISAs, which diminishes security of retirement savings.

And secondly, because it would devastate existing financial plans for millions of people. It is extremely common to factor that lump sum into retirement plans for things such as paying off a mortgage or providing for their children. In our view, it is unlikely the chancellor will go this far.

Business relief on the chopping block

In the firing line could be business relief, which allows entrepreneurs to pass down businesses with up to 100% inheritance tax relief. Shares in unquoted companies benefit in the same way.

The chancellor could remove business relief from this type of investment, or broaden his net to reduce reliefs on eEnterprise investment schemes, which can currently benefit from business relief on death.

Off-payroll enforcement expanded

The government’s 'off-payroll working' rules for the self-employed has already been introduced in the public sector, a move which it says is now raising £410 million a year in extra tax.

It would not be a surprise to see them consider the same for the private sector.