Despite the many rumours beforehand, the Chancellor still managed to produce some surprises on Budget Day. The structure of this Budget, like its predecessor, was driven by the pandemic’s impact on the economy.
As the number of people affected by Covid-19 now appears to be slowing as vaccines are rolled out, Mr Sunak was clear on the government’s intention to see out the next few months as lockdown eases with similar support for businesses and individuals. The existing pandemic schemes with which we have now become familiar – furlough, self-employment schemes, business loans and grants – have been extended through to the end of June or even beyond. He chose to spend big initially, announcing major investment incentives for companies in the next two years, adding further to the government debt mountain.
The total cost of his pandemic measures in this tax year and the next are now projected to be greater than the amount that will be raised in income tax over the same period. How the government can claw back that expenditure, while rebuilding the economy, formed the focus of the Chancellor’s speech.
Below is a summary of some of the key points discussed:
If you have any questions about how any aspects of your tax and financial planning may be affected by the Budget, please contact your Finura adviser.
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