There is just under a month to go until Wednesday 3rd March, when the government will publish the Budget.
The annual Budget usually includes statements on pay, taxes, benefits and other financial issues.
Last year’s Budget was very different to other years, as Rishi Sunak unveiled a host of specific measures aimed at helping people through the coronavirus lockdown. That included the furlough scheme and self-employed grants. It’s expected that the 2021 Budget will again focus on giving financial support to those affected by the pandemic.
The government has spent more than £200billion on tackling the coronavirus pandemic, and this will need to be paid for somehow. To do this, taxes could be increased.
As much as the Conservative Party promised in their 2019 manifesto not to raise Income Tax, VAT or National Insurance, nobody could have foreseen a global pandemic. Last year, the chancellor repeatedly refused to rule out any tax rises, and several recent reports have suggested that he has looked at tax increases for the upcoming Budget.
He is thought to be planning a large increase in corporation tax, which is based on businesses’ annual profits. This could be of particular interest to you if you are planning to draw profits out of your business just before or just after the start of the next tax year on 6th April 2021.
All UK limited companies have benefited from a 19% corporation tax rate since 2016, which is significantly lower than other countries including Germany, Spain and the Netherlands.
Another suggestion is that he may increase capital gains tax or amend the tax free allowances related to it.
Whatever happens, we’ll be following developments closely and will update further when we know more.
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