The Chancellor, Rishi Sunak is due to deliver his next Budget this autumn, an exact date and what we can expect is so far undetermined.
The Chancellor is under huge pressure to deliver policies to get the nation through the Covid-19 pandemic, which to date has put thousands out of work and tanked the economy.
When is the Autumn Budget?
The Treasury is yet to set an official date, the earliest we can expect it to happen will be the back end of November as this is when The Chancellor asked the OBR (Office for Budget Responsibility) to publish an economic forecast – the prerequisite to holding a Budget.
However, this doesn’t mean the Budget will definitely take place in November. Reports have emerged that the statement could be delayed in the event of a second wave, but a December date would be unlikely due to time constraints in parliament, pushing it back to next year.
What will the Budget include?
At this time we can only speculate what will be included in the Autumn Budget, especially with Covid-19 still impacting the global economy. Our research has unveiled the following:
Living Wage U-turn
There’s talk of putting an ‘emergency brake’ on the already announced increase in the National Living Wage as a result of concerns the pandemic has made it unaffordable.
The National Living Wage is the lowest hourly rate anyone over the age of 25 can legally be paid. Currently £8.72 an hour it was set to increase to £10.50 by 2024 – for everyone over the age of 21.
The wage was expected to reach £9.21 for the 2021/22 tax year, but the Low Pay Commission, who advise the Chancellor on the rate believes many companies could now struggle to pay it.
After spending billions on the Covid-19 response to date, the Chancellor is reportedly considering different ways he could recuperate funds for the Treasury. Reports suggest that the Chancellor is considering increasing Class 4 National Insurance (paid by the self-employed) from 9% to 12%, which could add £200 to the average self-employed tax bill.
This would bring self-employed National Insurance contributions in line with those paid by employees. When announcing the self-employed income support scheme in March the Chancellor hinted at this move, ‘if we all want to benefit equally from state support, we must all pay in equally in future.’
The Chancellor is also considering pausing the state pension triple lock promise, a cut to pension tax relief, and changes to capital gains and corporation tax.
These suggestions have been met with resistance from Conservative backbenchers and business leaders, potentially casting doubt over whether they will come to life.
Tax breaks for businesses are also being considered alongside these proposals.
In the summer statement the Chancellor’s ‘Plan for Jobs’ included schemes to entice employers to bring employees back from furlough and into creating new jobs for young people, however, that hasn’t stopped concerns that unemployment could reach historic highs in the not to distant future.
Unions are urging the Chancellor to do more to combat unemployment, including more support for sectors that are struggling the most.
In his recent speech the Chancellor unveiled his plans for job retention post furlough. Announcing a new job support scheme launching on the 1st November 2020 to protect viable jobs in businesses who are facing lower demand over the winter months as a result of coronavirus. This new scheme will run for six months and help keep employees attached to the workforce, the government will contribute towards the wages of employees who are working less than normal hours. Read more here.
Despite widespread calls to extend the Eat Out to Help Out scheme into September, it’s possible that the Chancellor could announce another unconventional way to stimulate consumer spending. There are no indications yet of what these could be, maybe another discount scheme, or more vouchers akin to the Green Homes Grant.