The much-anticipated Budget Statement has been released on Tuesday 27 October, giving the current Chancellor the opportunity to announce the latest Budget without national restrictions in place. Whilst we’re still feeling the impacts of COVID-19, we can now see the start of an economic bounce back, with forecast revenues ahead compared to the Budget announcement in March 2021, there comes a new optimism in the Chancellors announcement. Some of the key policy changes announced were: Increased spending for –
- Transport – £6.9bn (however this is only £1.5bn as it includes the 2019 promise of £4.2bn)
- Health – £5.9bn to tackle the backlog in the NHS
- Health research – £5bn over the next 3 years to help R&D
- Education – £2.6bn to create new school places for those with special education needs, with a £1.6bn over 3 years for the rollout of new T-Levels
Although there are no major increases, there is a continued effort to focus on investment and growth, whilst keeping the books in balance in a recovering economy. During the Budget Statement the Chancellor further announced:
- Inflation is likely to rise in the new year
- There will be a new Charter for Budget Responsibility
There were no increases to mention in tax, other than the previously announced Health and Social Care Levy which is in effect a 1.25% tax increase on all earnings and dividends. Other highlights include:
- Removal of the public sector pay freeze
- Increase in the National Living Wage to £9.50 from April 2022
- The 100% tax relief available to businesses on the first £1m of capital spend will be extended until 31 March 2023
- Cuts on Air Passenger Duty rates for domestic flights from April 2023
- Retail, hospitality, and leisure sectors will receive a 50% relief on business rates in 2022/23, with a cap of £110,000
- Alcohol rise cancelled, and lower strength alcohol will receive a drop in rates, with a further relief for draught sales and sparkling wine to be equal to still wine, based on wine strength
- The planned tapering of Universal Credit will be cut by 8% with the aim of slowing the cut by December 1, to help those relying on the claim
If you have any questions or would like to discuss the latest Budget announcement, please get in touch, call 0330 024 0888 or email [email protected]. Richard Proctor Tax Partner at Larking Gowen