26th October, 2021, Kayleigh Wilson
Autumn Budget Predictions
The Chancellor, Rishi Sunak will officially present his Autumn Budget and Spending Review to the Commons tomorrow, 27 October.
In this article, Kayleigh Wilson ACCA CTA, gives her Autumn Budget predictions, thoughts and analysis:
You may be forgiven for thinking that the Autumn Budget 2021 has pretty much all been announced via releases to the press; but these announcements are all the positives around spending and don’t dig into the details.
Based on these pre-announcements, we know that the Chancellor has already committed over £30 billion of investment to support economic recovery through schemes that support his government’s ‘Plan for Jobs’ and ‘Levelling Up’, although all this comes at a price and the announcements that will have the most ears will be around the measures put in place to financially support these.
We have already had a huge tax announcement this year with the planned introduction of the Health and Social Care levy that will raise National Insurance Contributions from April 2022.
This Budget also comes at the start of the government’s 10-year tax administration strategy and is being called a ‘technical budget’. This implies that the Chancellor may make technical changes that can raise revenue, rather than simply take the unpopular option of raising more taxes. An example of this is the proposed reform of basis periods for the self-employed, this is being sold as a simplification measure to help sole-traders and partnerships with the move to Making Tax Digital reporting from April 2023 but also has the potential to accelerate revenue for the Exchequer for 2023 and the next 5 years.
We know that Corporation Tax will rise from 19 per cent to 25 per cent from April 2023, but what other proposed changes might the Chancellor make to taxes in this Budget to try and balance the books?
Lots of commentators are predicting changes to Inheritance Tax and Capital Gains Tax following recent reviews by the Office of Tax Simplification. It is quite likely that the Chancellor could change Inheritance Tax Rules that would increase future revenues without directly changing headline tax rates.
Millions will get a pay rise next year when the National Living Wage is increased from £8.91 an hour, as the Treasury confirmed the move for all over-23s, on Monday.
This move supports the Prime Minister’s pledge to move Britain towards a high wage, high skill, high productivity economy.
With a lot of the Covid support schemes such as Furlough, Business Rates Relief and VAT relief coming to end, businesses will be feeling the impact on their cash flow.
There are calls from the business communities for the Chancellor to look at how business rates are calculated, to support the high street, and put some further package of support in for the hospitality and tourism industry.
We will be watching the Chancellor live as he presents to the Commons on Wednesday and analysing his announcement and the accompany documentation carefully.
Profile: Kayleigh Wilson ACCA CTA
Related pages: Budget 2021