BUDGET DAY IS 3 MARCH
The Chancellor, Rishi Sunak, will publish his budget on Wednesday 3rd March 2021. We all know 2020 was an extraordinary year and it seems to be rolling over into 2021. So what should we expect from this budget and what will it mean for you and will it affect your tax planning?
March’s Budget will be a landmark Budget, not only because of the pandemic, but also because it will be the UK’s first Budget as an independent country outside the EU for over 40 years.
The Coronavirus pandemic has meant the Chancellor has had to continually bring forth new measures to help businesses and individuals cope with the financial impact, as can be seen from the list of key changes noted below. The announcement was made the furlough scheme will be extended by an extra month to 30 April 2021, with the government continuing to pay 80% of wages until the end of the Scheme. Lets hope for some good news as this could be extended post budge.
Tax Rises (or no tax rises?)
There is large speculation as to what the Chancellor may do to recoup some of the £300bn the government has spent on boosting the UK economy. Will he go for tax raising measures or will he impose a one-off wealth tax? Or will he delay tax rises until the pandemic is well behind us?
Significant tax rises that apply to a wide population would be damaging to any economic recovery at this stage. What the Chancellor is more likely to do is put restrictions on some of the generous tax reliefs that we have got used to taking advantage of.
Those buying property may want to speed up those transactions if they can, as the beneficial stamp duty land tax holiday is scheduled to stop after 31st March 2021.
The Chancellor has ruled out the heavily rumoured one-off “wealth” tax. However it is possible we may see changes to our existing taxes, specifically Capital Gains Tax (CGT).
The Office of Tax Simplification has recommended equalising CGT rates with Income tax rates. There is great speculation for a reduction in the annual CGT allowance.
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