What Will The 2021 Budget Include?
In his brief time at No. 11 Downing Street, Chancellor of the Exchequer Rishi Sunak has gone from being relatively unknown to a household name. As such, the 2021 Budget predictions are buzzing with theories from…
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In his brief time at No. 11 Downing Street, Chancellor of the Exchequer Rishi Sunak has gone from being relatively unknown to a household name. As such, the 2021 Budget predictions are buzzing with theories from everyone – not just those in the financial sector.
This has meant that there’s a lot of misinformation about what will be in Sunak’s briefcase this Spring Budget. So, to help clear things up, we’ve provided our own predictions here. They include:
- COVID grant update
- Possible furlough extension
- Changes to Stamp Duty
- Tax increases and new taxes
- Changes to Universal Credit
- Additional support for businesses
More support for the self-employed
Taking place on Wednesday 3rd March 2021, this Budget is sure to yet again revolve around the theme of the coronavirus pandemic. However, the big question on most forecasters’ lips is what additional support will be offered to the self-employed.
News of a fourth self-employed COVID grant has indeed been confirmed, although according to MoneySavingExpert’s Martin Lewis, the lack of information for those applying for a COVID grant is “unnecessarily cruel”.
This is because the fourth grant in the Self-Employment Income Support Scheme (SEISS) will cover February through to April. However, the amount that sole traders will receive monthly won’t be confirmed until March, leaving them in the dark throughout February.
The extension of the furlough scheme
As it stands, the furlough scheme will end in April. However, it has already been extended multiple times before.
For this reason, it’s entirely plausible that the support will extend to the end of Spring. And if that’s the case, there’s no better time to announce it than during the Budget.
Stamp Duty holiday extension
Those in the housing sector are calling for the six-month Stamp Duty holiday to be extended. This popular tax relief has so far helped the industry power through the pandemic, although it is currently scheduled to expire on 31st March 2021.
There has been some speculation that the Chancellor will extend the holiday, but only for homes with offers already made. Others suspect council tax and Stamp Duty will be replaced altogether with a new property tax.
An increase in tax
It goes without saying that there will need to be significant tax initiatives deployed to claw back the money spent throughout the course of the pandemic. Methods such as increasing Class 4 National Insurance, raising fuel duty and cutting pension relief have all been rumoured, although nothing has been confirmed.
Others have speculated that the Chancellor won’t want to introduce measures that have a direct negative impact on consumer spending. That is to say, increases in minimum wage will still go ahead to increase the spending power of taxpayers. Businesses may instead foot the bill, with the introduction of a new tax aimed at online sellers.
Universal Credit boost
In 2020, the Chancellor announced a £20 a week boost to Universal Credit to help low-income families through the pandemic. This year, there are rumours that he’s considering giving all Universal Credit claimants a one-off payment of £1,000 instead.
This is because an additional £20 a week increase would cost the Treasury approximately £6bn a year if made permanent. However, Secretary of State for Work and Pensions Thérèse Coffey has strongly disagreed, throwing more uncertainty over the exact increase.
Can I apply for a COVID grant if I’ve not submitted my Self Assessment?
Details have yet to be announced concerning the requirements for the fourth installment of the self-employed COVID grant, otherwise known as the SEISS. However, there’s a good chance that the amount of support you receive could be determined by whether or not you’ve submitted your tax return.
Similarly, the Bounce Back Loan may well expect you to provide your latest Self Assessment tax return. This depends on the lender, of course, but if you don’t want to limit the support you can access, it’s recommended that you submit your earnings from the last tax year.
For this reason, we’re advising everyone to file their tax return now, despite the filing extension and whether or not these 2021 Budget predictions come true. Not only will this increase your likelihood of accessing support, but it’ll mean you avoid incurring any unnecessary interest.
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