The Budget on Wednesday comes as British businesses are bracing for a tough winter, with surging energy prices, labour shortages and supply chain disruption pushing up inflation. Join us on Wednesday as we live-tweet the Budget from 12.30pm, and on Thursday at 8am for our Budget analysis from our panel of specialists.
Rishi Sunak has already announced the biggest rise in personal taxes for two decades to fund social care in England and help the NHS recover from the pandemic. What other tax rises are planned?
The National Living Wage will rise from £8.91 per hour to £9.50. This is a 6.6% increase in the minimum wage for all those aged 23 and over – more than twice the current consumer price inflation rate of 3.1%.
The biggest big change to personal taxation has was already announced last month through the 1.25% increase to National Insurance, which will be used to provide more funding to the NHS and potentially to social care in 2022.
The Chancellor has already announced that the Income Tax personal allowance of £12,570 and the higher rate threshold at £50,270 will be frozen from next April until 2026.
Many expected increases to Inheritance Tax and Capital Gains Tax in the March Budget. This didn’t happen, but after reports from the Office of Tax Simplification, there has been talk that these could be a source of increased revenue for the government.
It is thought that a residential property developers tax will be introduced to pay for the removal of flammable cladding from high-rise buildings. The levy will be paid by housebuilders with profits of more than £25 million and is expected to raise at least £2 billion over the next decade.
The additional £20 per week for Universal Credit claimants ended on October 6, but there’s been a rumour that Rishi Sunak might make a cut to the 5% VAT rate on household energy bills, to help families cope over the winter.
And the spending plans?
A £1.4 billion investment fund is due to be introduced that will provide grants to encourage overseas companies to invest in British industries such as life sciences and electric cars.
Another likely initiative is that almost £2 billion will be invested by the government into building new homes on derelict or unused land in England. The government said 160,000 greener homes could be built on brownfield land the size of 2,000 football pitches. It also pledged to invest £9 million towards 100 urban “pocket parks” across the UK.
Leaked funding announcement suggests an extra £5 billion for health research and innovation and £3 billion to train workers for better-paid jobs. It includes £560m for adult maths coaching as well as extra funding for apprenticeships, skills bootcamps and new T-level technical courses for teenagers.
Another leak regarding funding is £6 billion of new money for the NHS to tackle backlogs which will include £2.3 billion to set up a network of more than 100 community diagnostic centres providing rapid access to tests, £1.5 billion to create surgical hubs for elective operations, and £2.1 billion improve IT infrastructure and digitising patient records.
We’ll be live-tweeting the Budget from 12.30pm on Wednesday, and will be presenting our analysis and views on Thursday at 8am at our Autumn Budget Event #budget #SBVBB #Budget2021