UK Budget
With the Budget on the way on 3 March, we take a look at what the Chancellor of the Exchequer, Rishi Sunak, might have in store.
Budget 2021: What to look out for
After the Prime Minister's announcement of his roadmap for lifting lockdown restrictions in England, followed by the First Minister's announcements for Scotland, attention is now firmly focused on the support promised by the Prime Minister and to be delivered by the Chancellor in the Budget. The Government's ‘COVID-19 Response – Spring 2021’, published on 22 February, stressed that the Government will do “whatever it takes” to support the country through the COVID-19 pandemic. It seems that the Budget will primarily address the need for continuing support as the economy reopens and the Chancellor is likely to face significant challenges in meeting expectations. However, there are still suggestions that we will see some tax increases (partially through the freezing of allowances), with more to come over the remaining life of the Parliament.
With the confirmation of the new style ‘Tax Day’ on 23 March, we now have what may essentially be a three-step process:
- The Budget on 3 March, delivering both the details of the ongoing COVID-19 economic support and a high-level outline of the Chancellor's direction of travel on how he intends to progress tax policy. Announcements of measures to be legislated in the Finance Bill will be also made on Budget day.
- On 11 March, the publication of the Finance Bill providing the detail on tax measures to be implemented now.
- On 23 March, the publication of the detail of what the future is likely to hold in the form of a series of tax consultations and calls for evidence that would traditionally have been published alongside the Budget. Several of the consultations to be published will be an important part of the Government's 10-year tax administration strategy. This focuses on Making Tax Digital, real-time information, making tax payments on a more-timely basis and a new framework to make tax administration and compliance simpler for HMRC and taxpayers alike. We will also see a summary of responses to the call for evidence on the future of business rates. None of the announcements on 23 March will require legislation in the next Finance Bill.
The “elephant in the room” remains the likely response to the increasing level of government debt as a percentage of GDP. We see the Chancellor as likely to look to boost the economy but at the same time raise taxes in areas of the economy that he thinks can bear it.
In the run-up to Budget, there are always rumours and predictions circulating, all with a varying likelihood of being included in the Chancellor’s speech. We have set out some of the more popular rumours and our assessment of what we might see and we will keep this under review as we get nearer to the Budget.
Featured press releases
What was your wish list for the Budget - We look at what you said you wanted the Chancellor to focus on in the Budget.
Based on responses to our Budget survey, businesses want to see the Chancellor provide additional support to those impacted by the pandemic. At the same time, they want to see steps taken to balance the significant deficit when he delivers his Budget speech on 3 March, but action on tax rises should be deferred to 2022.
1 Mar 2021
The Budget trilemma: businesses urge the Chancellor to provide additional COVID support, attract overseas investment and set out how to address the deficit – reveals EY survey
The Budget trilemma: businesses urge the Chancellor to provide additional COVID support, attract overseas investment and set out how to address the deficit – reveals EY survey
22 Feb 2021 London GB
Stimulate economic growth, address the deficit or both? What decisions might the Chancellor take in four weeks’ time?
Stimulate economic growth, address the deficit or both? What decisions might the Chancellor take in four weeks’ time?
3 Feb 2021 London GB
UK economy could avoid a double-dip recession after a resilient performance in November, reveals latest EY ITEM Club forecast
UK economy could avoid a double-dip recession after a resilient performance in November, reveals latest EY ITEM Club forecast
28 Jan 2021 London GB
The show must go on: Lack of an Autumn Budget doesn’t stop HM Treasury making a number of important tax policy announcements and new consultations
Chris Sanger, EY’s Head of Tax Policy, comments on today’s HM Treasury tax policy announcements
13 Nov 2020 London GB