THE CHANCELLOR’S AUTUMN STATEMENT
The 2021 Autumn Budget took place against a challenging economic and political backdrop. According to the National Audit Office the pandemic has cost around £370 billion so far. With further Covid-related uncertainties ahead, during what may be a difficult winter, the Chancellor referring to inflation, price increases and cost of living being a big deal through the Autumn and Winter.
However, following getting reprimanded by both The Speaker of The House yesterday and The Deputy Speaker today (“discourteous behaviour”), for leaking too much of the Budget in advance of the statement, the Chancellor got going….
'Our plan is working. Employment is up. Investment is growing. Public services are improving. The public finances are stabilising. And wages are rising.
Today's Budget delivers a stronger economy for the British people: stronger growth, with the UK recovering faster than our major competitors.
Stronger public finances, with our debt under control. Stronger employment, with fewer people out of work and more people in work. Growth up, jobs up, and debt down.
Let there be no doubt - our plan is working.'
The Office of Budget Responsibility (“OBR”) giving The Chancellor some breathing space enabling him to announce a raft of spending measures and no tax increases. The OBR forecasting that the UK economy will be at pre-pandemic levels by the end of this year (an increase from the March forecast of 4% to 6.5%), 6% in 2022, and 2.1%, 1.3% and 1.6% over the next three years.'
The Chancellor stated that borrowing as a percentage of GDP is forecast to fall, from 7.9% this year to 3.3% next year, then 2.4%, 1.7%, 1.7% and 1.5% in the following years. Underlying debt is forecast to be 85.2% of GDP this year, then 85.4% in 2022/23, before peaking at 85.7% in 2023/24. It then falls in the final three years of the forecast from 85.1% to 83.3%.
The Chancellor announced a wave of spending measures some, like extra funding for the NHS and the end to the public sector pay freeze, being announced in advance. The detail of the spending measures can be found on the Government’s website, but can be summarised as:
The Chancellor accepted that taxes were currently their highest since 1950, and he took responsibility for this, believing it to be the right thing to do in the current position, but wanting to work to reduce the tax burden before the end of the Parliament. With that statement and then our review of the information published after the speech, there are no real tax increases!
There has been already plenty of tax increases in the March Budget and the September announcement re the 1.25% increase to pay for social care.
We expected a technical statement and the tax notices following the Budget were technical! If you want to understand the changes to tonnage tax (shipping), or plastic tax, please do not hesitate to ask (prefer you didn’t, not our area!).
There were no changes to capital gains tax rates or reliefs, other than you now have 60 days to file your return following the sale of a residential property and pay the tax, as opposed to 30 days! (All those business sales, completed before the Statement keeping us and the solicitors busy!).