Chancellor Rishi Sunak’s third budget announcement seems profitable for Prosecco drinkers and low paid workers but isn’t admirable for banks, housebuilders and taxpayers.
Many major changes were already announced in the previous budget this year, so the speech was lighter. Major changes comply with corporate tax, a new social care levy, and an increase in National Minimum Wage.
So, let’s see who won and who lost from the autumn budget announcement on 27th October 2021:
Drinkers, pubs, and brewers:
Sunak called the British alcohol system “a mess,” overhauling the British alcohol system. The rate was taken from 15 to 6, with tax laddering in line with alcoholic strength. This directly states that taxes on drinks like white cider and Italian rads will see a spike. But, almost for all others, it means lower rates.
Banks:
Relief is given to banks in the form of reduced bank profit surcharge. The levy has been cut down from 8% to 3%. However, it wouldn’t be included much in practice. From 2023, the banks will be paying 28% effective tax due to the corporate tax rise.
Investors:
According to Blick Rothenberg “ “The biggest winners are probably investors, as there were no changes to capital gains tax or inheritance tax, something which had been widely rumoured to be on the Agenda. Though this is tempered by an increase of 1.25% in tax on dividends.”
Taxpayers:
A large looming increase in tax is the takeaway from the eye-catching giveaways on Prosecco and fuel. According to the Office for Budget Responsibility, “ Taking his March and October Budgets together, the Chancellor has raised taxes by more this year than in any single year since Norman Lamont and Ken Clarke’s two 1993 Budgets in the aftermath of Black Wednesday.” The tax burden of Britain is going to be the highest since 1950; the disadvantage is mostly falling on workers and self-employed who are likely to experience a significant spike in National Insurance contribution from Next April.
Housebuilders:
A tax increase of Euro 5 billion is hit on the housebuilders. The announcement claims a 4% tax on developer profits above Euro 25 million. The cash released from here would directly go to cladding remediation work.
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