There has been more Budget and less 'Coke gate' on social media this afternoon, or to be completely accurate, 'Coca-Cola gate'. Today it was back to business for Rishi Sunak and his seven fillings.
This Budget has been on the horizon for some time with intense speculation about just how the Chancellor is going to balance the books. It is also puzzling just how much that is in the Budget, was announced before the Budget.
There seemed little immediate balancing but more spend, spend, spend to help support communities and businesses so badly affected by the pandemic. The furlough scheme has been extended until the end of September. There are large injections of cash into pubs, the arts, cricket and football. 95% mortgages are to make a return.
It is worth noting that this Budget comes in the middle of various consultation papers from the Office of Tax Simplification (OTS) on a complete overhaul of capital gains tax (CGT). Many considered today would not be a tearing up of the tax rule books but an increase in the headline tax rates, particularly CGT. That was not to be the case.
Unsurprisingly there was a heavy focus on supporting businesses with various incentives, particularly in the hospitality sector.
The rate of 5% VAT was extended to 30 September with an interim rate of 12.5% for a further six months and returning to standard rate until April 2022.
Corporation tax has been in the cross-hairs of the Chancellor. There will be a punchy rise in corporation tax to 25% but not until April 2023. If a company's profits are £50,000 or less then a Small Profits Rate will apply at the current rate of 19%. Taper of the rate will apply above £50,000 and only companies with profits over £250,000 will pay the full rate of corporation tax.
For many purchasers seeking to push through their transactions before 31 March, the SDLT threshold of £500,000 will now cease on 30 June, a three month extension.
This all amounts to a big bill. It is going to require quick, significant economic recovery. The vaccine programme is running at full pelt and recovery will be heavily reliant on society opening up.
Many of the more painful measures are to come. The income tax personal allowances will be frozen for this year. Next year these will increase but then frozen until 2026. The headlines were accurate to that extent; no increase in the rate of tax but generating revenue by freezing personal allowances. This also extends to the inheritance tax nil rate band, residence nil rate band and the annual exempt amount for CGT.
It was always going to be difficult to announce significant tax increases whilst in the middle of a pandemic. There was little in this Budget to alter personal tax rates but that time may come, if not in the Autumn Budget then perhaps Spring 2022.