8th January 2020

The Chancellor of the Exchequer, Sajid Javid, has announced that he plans to hold the next Budget on Wednesday 11th March 2020. It is expected to be delivered around 12:30pm, following the Prime Minister’s Questions session.

The Budget was delayed from the Autumn by the general election and will be the first since the United Kingdom has left the European Union, which will occur on January 31st, with a transition period following that.

Tim McElwaine, Tax Senior Manager at UNW, commented: “The Chancellor has stated there will be an infrastructure revolution over the next few years, so there are likely to be major announcements on public spending and firming up of announcements made by both him and the Prime Minister last year. This included increased spending on the NHS and other public services. Climate change, housing and social care are some of the other key areas where action is needed. One of the tax cuts they have talked about which we are likely to see steps towards is a modest reduction in employee and self-employed NICs by increasing the NIC threshold.

“One of the big questions will be how all the extra spending will be paid for. The Conservative election manifesto had very few proposals for tax changes, though they did guarantee not to increase rates of income tax, NICs or VAT (which is rather restrictive, as these three bring in almost two-thirds of UK tax revenue). They have said they will not go ahead with a further cut in the corporation tax rate, from 19% to 17%, which was due to happen this April, but that will only go a small way.

“Sajid Javid has said he will update the rules of the Charter of Fiscal Responsibility, and no doubt he will loosen these to ensure he does not immediately break them with his spending announcements, so the question is probably not so much whether or not forecast borrowing will rise, but by how much and when it will peak.”

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