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Every year there is a lot of speculation on what the Chancellor will do in the Budget. Predictions are always hard to make. This year it seemed even more polarised… Many wondered whether Rishi Sunak would increase taxes to pay for the Covid support packages. Or whether he’d put that off another year because, as he has said himself, this isn’t over yet and that support isn’t quite finished.
He talked about the huge debt and risk the country is in with regards to the interest repayments on this, but he pulled short of saying that tax rises are effectively inevitable. It feels like he has pushed this down the road, possibly until the next election or, more likely, until we know how well the economy recovers from the last twelve months and more.
There were only limited immediate tax rises, with the biggest tax rise, being put on limited companies, not coming into force for a further two years yet. It was a budget primarily focused on trying to stimulate recovery. It proved many of the more gloomy predictions wrong.
In line with our mission statement of being the best all-round advisers to owner-managers we have waded through the Budget report to pick out the areas of importance to you and your business. There is always something lurking in the small print so stay tuned as over the coming weeks we continue to analyse this, and we will keep you up to date with anything we find lurking in the detail.
We have summarised the key items that may affect owner managed businesses in an our ‘impacts to owner managed businesses‘ article here. But to highlight some of the key areas that might be of interest to you:
In addition to these items we also detail:
We cover all these items in much greater detail here. Click the link to see our article about the Impact on Owner Managed Businesses.
And if you are a fan of data (like me) you can download our tax rates table for 2021/2022 here.
There were also a number of other announcements concerning broader issues which are worth a mention.
Read the other announcements by clicking the button below.
“This Budget provides reassurance to businesses, provided that they are able to restart and rebuild according to the Government’s road map.”
Dr Adam Marshall, director-general of the British Chambers of Commerce
“This announcement will bring hope to millions of business owners… That said, piling new wage costs on to the most precarious small employers on top of national insurance and pension contributions from July will put many under serious pressure… And company directors will be extremely disappointed to see that they appear to have been left out in the cold yet again.”
Mike Cherry, National Chairman of Federation of Small Businesses
“The extension to the furlough scheme [and self-employment grants] will provide a vital cushion to support jobs as restrictions unwind and firms begin the costly process of rescaling… but the Chancellor missed a trick by not providing grants for company directors, who continue to be left out in the cold.”
Jonathon Geldart, Director General of the Institute of Directors