Date03 Mar 2021
In the lead up to this Budget Statement, there had been fears that the Chancellor, Rishi Sunak, would seek to raise taxes early in order to help pay for the significant measures introduced to help the country through the COVID-19 pandemic. SMEs and their owners in particular were concerned that we may see rises to Capital Gains Tax and Corporation Tax, and also possibly a new Wealth Tax.
The Chancellor has taken a measured approach in this Budget, providing extensions to Coronavirus support schemes and indeed new support being announced. He did announce an increase to Corporation Tax rates from 2023, but has provided some protection for smaller businesses.
There was a promise of no increases to Income Tax, VAT and National Insurance rates, but there was no such promise for other taxes. This, together with the clear statement that “once we are on the way to recovery, we will need to begin fixing the public finances” paves the way for tax increases, perhaps to be announced later this year following a series of consultations. The Chancellor also announced that the OBR expect the economy to return to pre-COVID level by the middle of next year.
Businesses and their owners will generally be encouraged by today’s announcements. However, many of these bring added complexity at a time when owners are needing to spend time focusing on their business rather than complexities in the tax legislation.
Given the unprecedented year that we have faced, it was an upbeat message with welcome support for business investment, employment and training.
Across all areas of Tax, our experts have been commenting on their "first thoughts" of the 2021 Budget announcements. To read more, please use the following links:
Have you been affected by the Budget?
If you have any queries regarding the Budget 2021 announcements and the impact they may have on you or your organisation, please get in touch with your usual Azets contact or a member of our Tax team.
Watch our webinar
On 4 March 2021, our expert advisors explored the technical issues arising from the 2021 Budget and provided a practical assessment of the key announcements and their impact for both businesses and individuals. As ever with the Budget, the devil was in the detail. Our presenters also highlighted issues the Chancellor may not have made obvious in his address to Parliament.
To watch our webinar recording and download a copy of our slides, click here.