The autumn budget is set to take place on the 27th October 2021, with Chancellor Rishi Sunak confirming the date earlier this month. However, the government is yet to share any details around what they may announce on the day. But that is not to say that others haven’t already made their predictions. So, what should we expect to hear after what seems to be a never-ending stream of updates and changes? Kirk Hills, your local chartered accountants, will run you through the predictions for the Autumn Budget 2021 and what you should anticipate for it.
According to the Institute for Fiscal Studies (IFS), Rishi Sunak, Chancellor of the Exchequer, could usher in cuts in the region of £2bn. This will be for government departments tasked with meeting the Tories’ flagship “levelling up” agenda, as reported in the Guardian. The IFS said “the chancellor was on track to lift the UK’s tax burden to the highest sustained level in peacetime with a package of manifesto-busting tax increases at this month’s budget and spending review.”
What we already know
In an article written by Which, they ask whether the most significant announcement has already been made. Pointing to September, Which recall how the government announced a 1.25 percentage point increase to National Insurance from April 2022. This increase to the amount which you contribute towards your National Insurance will be dedicated to the NHS, with increased spending aimed to fix the social care crisis.
Similarly there was confirmation that the state pension ‘triple lock’ would be suspended for a year, guaranteeing that state pension will rise each year through inflation, average wage earnings growth or 2.5% depending on which is highest.
As well as an end to public sector pay freeze, there could be measures introduced which will seek to address the ongoing “cost-of-living crisis that serves as this Budget’s backdrop.” It is believed that a number of Conservative MPs are in favour of a potential cut to the 5% VAT rate for household energy bills.
Elsewhere, rumours continue to swirl around a possible announcement of an increase to the minimum wage for workers over the age of 23. It was something that was first mentioned in Boris Johnson’s Conservative Party conference speech, however, nothing materialised in the immediate aftermath, leading to speculation that it will be saved for the official Autumn Budget at the end of October.
While there is no doubt that further predictions are sure to surface as we build up towards the announcement, we will still have to wait until the 27th to find out exactly what will change. Until then, be sure to stay up to date with your local chartered accountants blog, and visit the Kirk Hills website again.