What can we expect in the Budget?

by | Mar 2, 2021

The Budget is tomorrow (3 March) and Chancellor Rishi Sunak will make a statement to MPs in the House of Commons outlining the state of the economy and the government’s plans for raising or lowering taxes. The Budget includes decisions on what the government will spend money on and forecasts for how the UK economy could perform in future.

At the upcoming Budget, we expect the government will outline further detail on economic support to help protect jobs and livelihoods across the UK. That has been their priority throughout the past year, and they state it will be the priority for the year to come. Yesterday we heard the news that the government was set to launch a £5bn fund in England to help the High Street recover from Covid.

The chancellor said the grants, worth up to £18,000 per firm, will help shops and pubs reopen as England eases lockdown. Details will follow on Wednesday and we will keep you informed and how to claim shortly. 

Pre-budget news releases report the Chancellor is set to announce a £126m boost for traineeships in England. The scheme will include a new “flexi-job” apprenticeship that will enable apprentices to work with a number of different employers in one sector. The boost to existing apprenticeship and traineeship programmes will include paying up to double the current cash incentive to firms who take on an apprentice, regardless of age.

A mortgage guarantee scheme to help people with small deposits get on the property ladder is also set to be announced and the government will offer incentives to lenders, bringing back 95% mortgages.

There is also talk of the Chancellor announcing the creation of “freeports” to help boost trade and manufacturing. Freeports are areas around a port or airport, where goods can be imported without having to pay import taxes and these taxes only become payable when the goods leave the freeport and are distributed elsewhere in the UK. If goods are re-exported they do not have to pay the relevant UK taxes. The building and operation of freeports in deprived areas could help stimulate the local economy in England. The other countries of the UK have their own freeport policies.

You will be able to download our full budget report for free on 4 March following the Chancellor’s Budget. It will be interesting to see if there are any tax increases, or will he focus on stimulating economic growth?

The Government has launched a new campaign to encourage the nation to keep going and stay at home. The new advertising reminds people everything they’re doing is helping stop the spread of the virus. As set out in the roadmap, lockdown will begin to lift but it emphasises the need for caution to keep the virus under control. 

While transmission rates decline, vaccines continue to be rolled out and the roadmap out of lockdown has been published, the new campaign is encouraging people to ‘keep going’. It acknowledges how difficult lockdown has been but highlights its effectiveness with falling infection rates and successful vaccine roll-out.

See: https://www.gov.uk/government/news/new-campaign-encourages-the-nation-to-keep-going-and-stay-at-home?utm_medium=email&utm_campaign=govuk-notifications&utm_source=c83ef2d8-8065-418f-b788-5dc000a2b869&utm_content=daily

As the vaccine roll out continues, the Joint Committee on Vaccination and Immunisation (JCVI) has recommended that the following groups should be prioritised, once all at-risk groups in phase one have been offered at least one dose of the vaccine:

  • all those aged 40-49 years
  • all those aged 30-39 years
  • all those aged 18-29 years

All four nations of the UK follow the recommended approach, the government says, with all those in the phase one priority groups vaccinated by mid-April, and all adults by the end of July.

If the vaccine supply continues, and the programme is effective, we can look forward to some return to normality this year. If you run a business, now is the time to plan ahead and get ready for the increase in activity that we are all expecting. Please talk to us about how we can help with forecasts and “what if scenarios”.   

Tell us about your business

Explore where you want to go, what you need to get there and how ABG can help.

ICAEW Chartered Accountants
Probate Accountants
International Accountants EAI members
BAS Approved Chartered Accountants