As we all eagerly await Chancellor Rishi Sunak’s Autumn Budget 2021 tomorrow, what can we expect from the statement and how will it affect the UK moving forward?
While there is no official word from the government about what will be covered during the announcement on 27 October here’s what we know will be mentioned:
This does not constitute advice and advice should be sought in all instances before acting on it.
What we know
In a bit of a twist, the major changes that could be included in the announcement might have already taken place. The 1.25% increase to National Insurance beginning April 2022 in order to fund the NHS and help fix the social care crisis is expected to be included.
The plans to suspend the triple lock pension – which guarantees the state pension will increase every year by inflation, average wage earnings growth, or 2.5% (whichever is highest, normally) – for a year should also be included in the announcement.
There should also be the inclusion of the £500m Household Support Fund for councils intended to help cover the daily living expenses of people in England in order to get the public in need through the winter.
Tax rises or cuts?
Previously, Chancellor Sunak announced that the way he plans to fund necessary recovery efforts is through tax rises, as opposed to borrowing. He confirmed that tax cuts, at this point in time, would be immoral and that taxation has already hit the limit.
Despite already freezing several tax thresholds in the March 2021 Budget, there are rumblings that there will be even more changes to capital gains tax (CGT) allowance this time around. Sunak previously ordered an urgent review from the Office of Tax Simplification (OTS) in July 2020, and one of the proposals made by the OTS was to align CGT more closely with income tax rates and to reduce the CGT allowance from £12,300 to between £2,000 and £4,000. Tomorrow’s announcement should shed some light as to whether or not these proposed changes will be adopted.
Be sure to check back to see how the Autumn Budget announcement might affect you or your business.
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