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Ahead of the chancellor’s budget on 3 March 2021, Deloitte has predicted that it will concentrate on fuelling economic growth by encouraging investment across the UK.
Ian Stewart, chief economist, Deloitte, explained that the “heavy lifting” needed to rebuild the public finances will need to wait until the recovery is “well entrenched”.
He stated that this budget is likely to outline a “road map for the winding down” of pandemic support schemes along with more “limited and selective” support for at risk sectors.
Amanda Tickel, head of tax policy, said that whilst an “extensive balancing of the books” fuelled by large scale taxation may have to wait for now with the focus on business support measures, the chancellor will be keen to “demonstrate fiscal credibility” by taxing those who have made profits during the pandemic.
Rachel McEleney, associate tax director at Deloitte, added: “If the government sticks to its pledge of a ‘triple tax lock’ on rates of income tax, NIC and VAT, the scope for big revenue raising tax measures is narrow.
“The chancellor confirmed his intention to raise the personal allowance and basic rate band in line with inflation in the 2020 Spending Review, which would result in an income tax reduction of up to £68 per taxpayer, and legislation has already been made to give effect to this.”
Gerry Biddle, director of business rates, concluded that the government has “committed” to freezing the Business Rates multiplier for 2021/22, so bills “should remain at the same level” as 2020/2021.
He said: “One proposal was reducing the level of Business Rates by supplementing them with a possible online sales tax. It is likely that the chancellor will give a high level analysis of the review and announce further work to be carried out, in particular in regards to an online sales tax.”
