It was announced last week that Rishi Sunak will deliver his half-yearly budget statement on the 27th October 2021. At the same time he will outline his three year spending plan.
Given the amounts that have been spent by Government to support the economy through the pandemic, it’s likely to be a tricky exercise.
Sunak has said that he wants to return public finances to ‘a sustainable footing’. This comes after the UK budget deficit in 2020/21 hit a peacetime high of 14% of GDP in March 2021.
We’ve already been the announcement of a £12billion increase in taxes to fund the new health and social care levy, and it’s possible there is more to come.
The finance ministry has reported that government departments have been told to find cuts of at least 5% to allow for reinvestment in priority areas, according to Reuters reports. We already know that Corporation Tax rates are going to increase and, taken with the new levy, amount to the largest tax increases since the mid-1970s.
It remains to be seen how the economy responds as we head into winter, the continuing recovery from multiple lockdowns and potential further issues with increased case numbers. There is a chance that further support may be required from Government and those funds may be hard to find.
Whatever is announced on the 27th October, we’ll let clients and those on our mailing list have our usual summary as soon after the announcements as we can. We’ll also take a good look at the small print once its available to look at the detail, and let you know how you will be affected.
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