Autumn Budget 2021 preview
With only a few days until the Autumn Budget, read our latest predictions and where to find our most up to date commentary on and after Budget Day.
With only a few days until the Autumn Budget, read our latest predictions and where.......
The Chancellor of the Exchequer, Rishi Sunak, will present the second UK Budget of 2021 on Wednesday 27 October. In the last edition of Tax Matters Digest we published our predictions but the last couple of weeks have unearthed more information about what may or may not be included in the Chancellor’s red box. You only predict once but in this article we will provide a round-up of the latest expectations. We also set out where you can access our most up to date commentary on and after Budget Day.
How to find our Budget commentary
You can keep informed with all the latest news on our dedicated Budget site which will be regularly updated with insights and commentary, including our on-a-page summary of the key announcements.
On Friday 29 October we will publish a Budget special edition of Tax Matters Digest, but on the day you can watch our Linkedin Live event at 16:15 to hear our initial reactions.
And don’t forget to register for our Autumn Budget Webinar on Friday 29 October at 12:00-13:00 in which our economic and tax specialists will provide an in-depth analysis in relation to the economy, businesses, and individuals.
Our Budget predictions can be found in our blog Autumn Budget: A licence to Tax?. But, as always, speculation intensifies as Budget day nears, and, for your eyes only, this is a round-up of the latest expectations.
The Living Highstreets
An online sales tax (OST) remains in the Chancellor’s sights. Whilst we still do not expect an OST to be announced on Budget Day, we may see a consultation with a view to a more formal announcement in Spring 2022.
Any OST was expected to be coupled with Business Rates reforms to help level the playing field between online and bricks-and-mortar retailers. This now looks unlikely, meaning the Spectre of high business rates looks set to continue for the foreseeable future, to the dismay of many industry groups.
The World is Not Green Enough
With COP 26 imminent, the Government recently published its ‘Net Zero Strategy: Build Back Greener’ containing ambitious plans to make the UK Net Zero by 2050. These include phasing out the sale of new petrol and diesel cars by 2030 and powering the UK with ‘clean’ electricity by 2035. HM Treasury analysed the fiscal impact of these plans in its ‘Net Zero Review’ report. The loss of £37 billion per annum from vehicle fuel taxes and the significant increase in public spending required to decarbonise the country means it’s Never Say Never (again) for new taxes: HM Treasury has warned these may well be needed to deliver decarbonisation sustainably – but gives nothing away as to what these new taxes might be.
Despite the focus on the Government’s green ambitions, there are reports that the Chancellor will cut the 5 percent rate of VAT on household energy bills giving some Quantum of Solace for UK households in the face of the rising cost of living in the UK.
A View to a Cut?
We understand that the Chancellor is set to cut the Bank Levy from 8 percent to 3 percent. Although the Treasury has declined to comment, the Chancellor did commit to reviewing the Bank Levy after announcing the increase to the main corporation tax rate in March in order to ensure the City remained competitive in the global economy.
Sparkling, not still
Not quite a dry martini, but it has been reported that the Chancellor plans to bring the levy on sparkling wine in line with the rate charged on still wine. The measure is intended to give UK sparkling wines an advantage over their foreign counterparts.
These latest developments have mildly shaken but not meaningfully stirred our predictions. Overall, however, it is looking like the Chancellor is tending towards taxing another day.