The Budget – what the papers say…
First published on 25 October 2021 by Alastair
With the budget looming, we thought it was a good idea to see what the press is reporting – and then, once the Chancellor has sat down, we’ll see if they were right.
The reality is that the ship of state is, as we know, the only one that leaks from the top down, so much of what we have read online will be from (relatively) trusted sources, but that said it’s also the case that there are always one or two surprises kept in the folds of the famous red box. However, from what we’re seen so far, this is what to expect…
- More money for the NHS and the public sector generally, including pay rises as well as the big infrastructure projects.
- A rise in the minimum wage. A figure of £9.50 an hour is being touted.
- According to the BBC, there are several things to watch out for, including the 5% VAT on energy bills being cut, partially to offset the huge increases that we’ve all been seeing (and will continue to see) as the gas price has rocketed this year. In addition, the BBC also thinks there may be changes to alcohol duty. A change (lowering) of the threshold at which student loans start having to be repaid may also happen, as may a cut to pension tax relief.
- One thing that will affect almost all M&S’s clients is a change to Capital Gains Tax. There are various options available to the Chancellor, but let’s wait and see what he actually does…
- Some tinkering (or worse) with Inheritance Tax is also a possibility according to several articles we’ve read.
- As part of the continuing use of threshold creep (stealth taxes) to bring in more tax, will we see the current £2,000 dividend tax allowance being reduced? This, of course, can also be applied to IHT and CGT
- Business rates – a thorny issue for many and a source of contention as bricks and mortar retailers struggled to compete with the online giants during the pandemic. What will Rishi Sunak do?
- And on a similar theme, will an online sales tax be introduced
- A tax surcharge on bank profits? The Chancellor is reportedly planning to more than halve this in order to boost London's competitiveness as a global financial centre.
- With the environment dominating much of the news, it will be no surprise to many commentators if there are more ‘green taxes,’ including, for the first time for ages, a rise in fuel duty.
- And finally, will there be any tax cuts? Perhaps, as a rabbit out of the hat, but we are not convinced that the current state of national politics will allow for much sleight of hand.
Whatever happens, we’ll have our own take on it available to all our clients (and anyone else interested) as soon as we’ve absorbed all the small print and worked out who benefits and who loses!
Vivian Linstrom and Christopher Leslie, M&S Accountancy & Taxation