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Budget headlines from Cranwell Wealth Solutions

12th March

This week the Chancellor gave his first budget since the UK left the European Union. There were many announcements made and here Cranwell Wealth Solutions of Uckfield and Heathfield summarises some of the key points:

  • The economy is predicted to grow by 1.1% this year, revised down from 1.4% a year ago. This figure does not take into account the impact of coronavirus. Inflation is forecast at 1.4% this year, increasing to 1.8% in 2021-2022.
  • The main headlines on tax were that the tax threshold for National Insurance Contributions will rise from £8,632 to £9,500. Those earning more than £9,500 will be, on average, £85 a year better off. Tax paid on the pensions of high earners is to be recalculated.
  • Some good news for businesses as business rates in England will be abolished for those in the retail, leisure and hospitality sectors with a rateable value below £51,000. Business rate discounts for pubs will rise from £1,000 to £5,000. Firms eligible for small business rates relief will receive a £3,000 cash grant.
  • Tobacco taxes will continue to rise by 2% above the rate of retail price inflation, but duties on fuel and alcohol will be frozen. VAT on digital publications, such as newspapers, e-books and academic journals are to be scrapped from December. Plastic packaging tax to come into force from April 2022.
  • Entrepreneurs’ Relief will be retained, but lifetime allowance will be reduced from £10m to £1m.
  • High-quality broadband will continue to see a focus with £5bn to be spent on getting gigabit-capable broadband into the hardest-to-reach places.
  • Total investment in flood defences in England to be doubled to £5.2bn over the next five years.
The United Kingdom Budget statement is made by the Chancellor of the Exchequer, a member of the Government who is responsible for all economic and financial matters. He controls HM Treasury. ands the revenues gathered by Her Majesty’s Revenue and Customs and the expenditure of public sector departments and can raise taxes and duties according to the needs of the economy.
After the Prime Minister, he is the most important state officer. The Budget is normally an annual event in March, but in more recent times a mini budget has also been held in November. The budget speech is always carried to the House of Commons in a red briefcase, known as Ministerial Boxes, or Red Boxesaa. This red briefcase has become representative of the annual UK Budget. Historically, it dates back to the first use by William Gladstone in 1860.

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