4 March 2021: ICAEW has welcomed the short-term support announced by the Chancellor but warns that more long-term help will be needed as the impact of COVID-19 may be with us into the next decade.
4 March 2021: The UK economy is set to be 3% smaller than expected before the pandemic, with public sector net debt forecast to peak at 110% of GDP in 2024.
With the end of the pandemic hopefully near, the Chancellor clearly set out the fiscal damage to the UK economy and that the road to recovery will be a long one. Frank Haskew, Head of the Tax Faculty, shares his thoughts on a Budget that aims to rebuild the economy.
4 March 2021: Business fears about a sudden end to support and across-the-board tax rises were largely unfounded, but businesses stand to lose out in the longer-term.
ICAEW analysis of key annoucements
On 3 March the government confirmed it will reform the penalty and interest regimes for VAT and income tax self assessment (ITSA). The measures will bring significant changes and will first apply to VAT returns from April 2022 before being extended to ITSA returns.
The criteria for the fourth and fifth SEISS grants will include 2019/20 self assessment tax return data and widen the scheme to hundreds of thousands more taxpayers, but close it to others. Ahead of legislation and HMRC guidance ICAEW’s Tax Faculty explains what we know so far.
ICAEW's Tax Faculty provides a summary of the announcements on tax and related matters in the 2021 Budget on 3 March, covering: business tax, COVID support, duties, employment taxes, environment taxes, international taxes, MTD, personal tax, property tax, tax compliance and VAT.
5 March 2021: Expectations were riding high for a Budget that delivered on the ‘build back better’ promise. But despite several promising initiatives, when it came to substantive green measures it was found wanting.
5 March 2021: The Budget provides the basis for this week’s chart, which illustrates government plans to achieve a current budget surplus to meet a new fiscal rule that hasn’t yet been formally announced but was hinted at.
5 March 2021: For those wanting to green their personal finances, this Budget offers new ways to put your money to work for the benefit of the planet. ICAEW’s Philippa Kelly highlights what savers and investors might want to look out for.
4 March 2021: Chancellor Rishi Sunak has unveiled a new fraud taskforce to clamp down on criminals who exploit the government’s COVID support schemes.
The government’s coronavirus support schemes will be extended beyond the timetable for opening up the economy, to help recovery. ICAEW’s Tax Faculty highlights the main Budget announcements.
Tax Day announcements
Examining how the UK’s tax system is administered, when taxes should be paid, simplification opportunities and the benefits of digitalisation, form the heart of the HM Treasury’s ‘Tax Day’ announcements, but more detail is awaited in many areas.
HMRC is seeking views on bringing the payment of income tax and corporation tax closer to the point when the income arises. Any changes will be controversial but will not be made within this parliament. ICAEW’s Tax Faculty wants to hear from members.
ICAEW commends the government and HMRC for seeking to modernise the administrative framework underpinning the tax system, but will HMRC have the resources to do it properly and how radical might any changes be? ICAEW’s Tax Faculty explains the call for evidence and seeks the views of members.
As part of its work to raise standards in the tax advice market, HMRC is seeking views on its proposal to require tax advisers hold professional indemnity insurance and on a potential enforcement regime.
HMRC has published a second consultation on developing rules for large businesses to report uncertain tax positions, as it continues to work with stakeholders on how to resolve tax disputes quickly.
Tougher requirements for transfer pricing documentation will better focus compliance interventions and bring more alignment with international approaches, according to HMRC. ICAEW’s Tax Faculty outlines a new consultation on updating rules.
Using the tax system to support the UK’s commitment to reduce its environmental impact is not as simple as it seems. ICAEW’s Tax Faculty outlines two new consultations on taxes that aim to reduce carbon emissions.
Webinars on Budget 2021
In this free webinar on 5 March, the Tax Faculty team will be reflecting on the tax related announcements made by Rishi Sunak in the Budget 2021.
Rebecca Benneyworth MBE, west of England member and award-winning tax lecturer, will give an update about key announcements. This free event is aimed at sole practitioners and small firms, though anyone is welcome to join.
This session, part of ICAEW's virtual CPD event offering, will provide an update on the tax content of Budget 2021. The session will be designed for members in practice and business.
Be part of the conversation with Rebecca Benneyworth and ICAEW Tax Faculty, as they discuss current events, noteworthy developments in tax and give you the opportunity to pose questions
26 February 2021: The Chancellor needs to build a bridge to economic recovery in his first Budget on Wednesday, focusing on jobs, exports and investment. But with the OBR’s official projections showing public debt to be on an unsustainable path, what vision will he set out for the public finances in the long-term?
24 February 2021: Economies across the world are at a crossroads. ICAEW President David Matthews outlines the scale of the challenges we now face and comments on the investment that will support recovery and change.
22 February 2021: The UK reported an £8.8bn fiscal deficit in January, bringing the total shortfall over ten months to £270.6bn. Public sector net debt is up by £316.4bn and now exceeds £2.11tn.
Ahead of the 2021 Budget, ICAEW members believe that the Chancellor should avoid major tax changes, encourage job creation, help SMEs to keep exporting, accelerate digital infrastructure rollout and soften the business rates cliff edge to help businesses cope with the continued challenges of the pandemic, while positioning the country for recovery in the longer term.
Q4 2022: The latest Business Confidence Monitor (BCM) shows business confidence falling further across the UK as difficult economic conditions combine with political turmoil.
Quarterly analysis on each UK region covering growth, investment, and business confidence.
15 February 2021: Ahead of Budget 2021, three-quarters of chartered accountants have said they do not want to see major changes, according to new research from ICAEW. Instead, members have called for more focus on creating jobs and supporting trade relationships.
5 February 2021: This week's chart focuses on the Japanese economy as it seeks to return to relative fiscal normality in the year commencing 1 April 2021, following multiple supplementary budgets in its current financial year.
ICAEW letters to the government
Ahead of the Budget on 3 March ICAEW's Chief Executive, Michael Izza, has written to the Chancellor outlining three policy areas that ICAEW would like to see addressed. It calls for action to boost job creation, help SMEs to export and accelerate digital infrastructure rollout.
A response dated 14 January 2021 to the Treasury in advance of Spring Budget 2021.