Autumn Budget 2021 – Predictions – Oldfield
The Autumn Budget will be announced alongside a Spending Review on Wednesday, 27 October 2021. With the UK still recovering, what could be in this announcement for businesses? Speculation is perhaps more muted than usual, in part because we have already had one Budget this year. Also because we have recently had a significant tax announcement from the Government in the form of the Health and Social Care Levy.
However, as this is both a Budget and a Spending Review, the Chancellor will want to report on the state of the economy, especially as the Coronavirus Job Retention Scheme (CJRS) has come to an end. He may want to set out his thinking on the economics of working towards net-zero, especially as the UN Climate Change Conference (COP 26) starts in Glasgow the week after the Budget.
Our tax specialists and experts give their thoughts below on what may be in store:
Business investment Joe Brewer, consulting partner at Oldfield Accountancy & Advisory, commented:
“This could come in the form of improved R&D tax reliefs, extending the super-deduction on certain capital expenditure or more support to employers with upskilling workers and increasing productivity. We may see geographically targeted incentives in regions outside of the South East (or even further expansion of the Freeports proposals), including employment tax incentives for skills developments as part of the levelling up agenda.”
Business rates Jack Bennett, tax team, commented:
“The Government's response to the fundamental review of business rates is due this Autumn so we should expect to see some meaningful announcements on business rates at the Budget.”
Jobs and employment taxes Carl Taylor, business consultant, commented:
“With the increase in NIC and tax on dividends, it is difficult to see another large announcement around employment taxes of this type being made. Instead, to show jobs are a priority, the Budget could include tax incentives for businesses to hire domestic workers, as well as for those creating green jobs and training. However, one area could be an increase to the minimum wage.”
Inheritance & Capital gains tax Gerry Surtees, chartered tax adviser, commented:
“Lots of commentators are also predicting changes to Inheritance Tax and Capital Gains Tax following recent ‘simplification’ reviews by the Office of Tax Simplification. IHT is increasingly bringing in more tax for the Treasury (a record £571m in July 2021) and it would be quite straightforward for the Chancellor to ‘simplify’ many IHT rules that result in increasing future revenues without directly changing headline tax rates.”
“Capital Gains Tax could be an area for more change and has been discussed for some time – there could well be something in this Budget in this area, albeit some ‘technical’ changes.”
Personal taxes and pensionsAngus Brewer, business and tax consultant, commented:
“Could this be the Budget where changes to pensions tax relief predicted many times in the past, particularly for higher rate taxpayers, are finally announced?”
“Given the recent 1.25% increases in National Insurance rates and income tax rates on dividends, it seems unlikely that there will be further increases to income tax or national insurance in this Budget. Modernisation of the tax administration framework will remain a focus.”
Climate measures Jack Bennett, tax team, commented:
“With COP26 in mind, the Budget could be used as an opportunity to take forward the UK’s green economy and expand on the Government’s plans for a greener future. We may see new tax incentives for investment and environmental business practices, together with new or higher taxes on emissions or indirectly on products which give rise to those emissions.”
Keep up to date with Budget developments
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Please note: This article is provided for information only and was correct as at time of writing (20/10/21). Any lists and details provided above are not exhaustive and are not intended to be full and complete guidance. No action should be taken without consulting detailed legislation or seeking independent professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this article can be accepted.