Editorial team AccountingWEB.co.uk
In association with
Share this content
UK Budget 2020 preview
iStock_Budget red box_stocknshares

Budget 2021 live blog: Countdown to 3 March

by

Track all the rumours, leaks and policy steers leading up to and beyond Rishi Sunak’s speech on Wednesday 3 March.

3rd Mar 2021
Editorial team AccountingWEB.co.uk
In association with
Share this content

Anticipation for one of the most eagerly awaited Budgets in recent years spilled into the news schedules weeks ahead of the big day. To cater for the growing interest, AccountingWEB enlisted our tax brains trust to monitor all the rumours, leaks and policy steers leading up to and beyond Rishi Sunak’s speech to the Commons at 12:30pm on Wed 3 March.

* * *

3 March, 13:52 – Tax and insurance specialist  Seb Maley responded to the Budget by pointing out the ‘cracks’ in Sunak’s plan.

“On the face of it, the headline grabbing measures in this Budget seem generous - no immediate increase in corporation tax, a freeze on personal tax thresholds and more support for the self-employed will please many people working for themselves, in the short term at least. Dig deeper though and the cracks in this Budget become clear.

“The Chancellor reiterated that he will do ‘whatever it takes’ to support people and businesses. Yet millions of small business owners have been abandoned and left stranded without meaningful financial help for an entire year. The government must go further - these workers are key to the economic recovery.

Register for free to continue reading

It’s 100% free and provides unlimited access to the latest accounting news, advice and insight every day. As well as access to this exclusive article, you can:

View all AccountingWEB content
Comment on articles
Watch our digital shows and more

Access content now

Already have an account?

Replies (19)

Please login or register to join the discussion.

avatar
By Paul Crowley
24th Feb 2021 11:23

'No current change to CGT
This review is to put back to next year, as HMRC just cannot cope with the overwhelming number of CGT transactions that have occurred in the last three months.
We will leak again to trigger the same activity next year

You Tube bloggers who have contributed so significantly to the number of properties moved into corporate entities will be able to claim a 'special commission' grant of £1,000 for every ten views of appropriate tax raising material.

Furlough has been so successful that all tax credits and universal credit will now be dealt with by the claimants last employer.

The Loan charge Fiasco will be resolved
No tax will be charged on such arrangements. HM Gov will however stand in the shoes of the lender and look for early repayment of the actual loan.
If any such lender considers they have made a loss they can attempt to challenge HM Gov. but must demonstrate that they have actively persued that loan since inception. We have counsels opinion on this matter in our favour.
There will be a minor change to the Bona Vacantia rules to facilitate the change.

I am reminded that Nanny said neither a borrower nor a lender be.
This resolves that problem once and for all. Both parties will become neither.

Finally MTD
It would appear that the tax gap recovery has been non-existent. HMRC have finally admitted that they just made it up. I have seen the fag packet. It was done in pencil so that the figures could be changed later.

As several tax agents have pointed out, tax returns are submitted electronically and HMRC are still unable to state what the benefit to HMRC would be for 15 loads of rubbish followed by 3 correct part returns would achieve over one single tax return
MTD is therefore going to be left as it is, a theorem that failed in practice

This is not in any way connected with the MPs petition arising from the Commons Landlords and Landowners Group holding a meeting after reading a couple of AccountingWeb threads and articles.

I commend..........'

Thanks (5)
avatar
By DaveyJonesLocker
03rd Mar 2021 13:28

IS furlough subject to a test of turnover? I thought that was just the SEISS grants?

Thanks (0)
Replying to DaveyJonesLocker:
avatar
By SXGuy
03rd Mar 2021 13:34

Agreed. The test was in relation to the seiss grants. Furlough remains at 80% with an employer contribution of 10% and 20% in the last few months of the scheme.

Thanks (0)
Replying to SXGuy:
avatar
By DaveyJonesLocker
03rd Mar 2021 13:34

Hope the article above gets edited! Before payroll operators groan more than they are already!

Thanks (0)
Replying to DaveyJonesLocker:
John Stokdyk, AccountingWEB head of insight
By John Stokdyk
03rd Mar 2021 15:12

I will do that asap - thanks for alerting us.

It's all my fault (as usual), but I was typing stuff in as he went along and missed the very rapid segue in his speech from CJRS to SEISS - don't you just love the dramas of Budget day?

Thanks (0)
Replying to DaveyJonesLocker:
blue sheep
By Nigel Henshaw
03rd Mar 2021 13:34

yes I heard just the SEISS

Thanks (0)
avatar
By DaveyJonesLocker
03rd Mar 2021 13:38

So the really small businesses who manage fine without digital accounting, but HMRC want to enforce MTD onto them, won't get any benefit at all from the software discounts. Sounds about right for their attitude thus far.

Thanks (0)
avatar
By NeilW
03rd Mar 2021 14:00

"The carry back losses extension + super enhanced Cap Allowances (both Trump policies) will decimate corp tax take in short-term."

That's sort of the point. We have an economy short of spending. There is a fat incentive to do the spending now and create more jobs and activity, which just moves the tax take elsewhere.

You'd think accountants would have mastered the simple Geometric Series that shows any amount of government spending causes the same amount of taxation to arise for any positive tax rate. It's like a stone skipping across a pond. All that changes is the number of hops.

With regular pauses on the video of the stone skipping caused by people deciding to save, not spend.

Thanks (0)
Replying to NeilW:
blue sheep
By Nigel Henshaw
03rd Mar 2021 14:08

Is that really likely to work? we will have to see

Even so, I am struggling to see how the fairly meagre rises in tax pays for all the spending

Thanks (0)
Replying to NH:
avatar
By NeilW
03rd Mar 2021 15:03

Do the maths. My spending is your income less tax, your spending is my income less tax.

Set the tax rate at 1%, and do the Geometric series. The government pays you £100, less £1 tax so you have £99. Then you spend that with somebody else and pay the 99p tax, leaving them with £98.01 and so on.

Then change the tax rate. You'll see all that changes is the number of transactions before you get to zero.

Stop the series half way through and there's your 'deficit'. Restart the series (ie spend your savings) and it will complete in the same way.

Thanks (0)
avatar
By bmoster
03rd Mar 2021 14:16

What are the qualifying criteria re employees for the furlough extension? Is it still the same i.e the employee had to have been included on an RTI submission by 30 October 2020 or can new employees now join who weren't eligible up until now?

Thanks (0)
Replying to bmoster:
avatar
By Paul Crowley
03rd Mar 2021 16:15

No rules yet declared on anything in budget
HMRC still have to approve what was said and find ways to annoy all parties involved.

Thanks (0)
Replying to bmoster:
avatar
By acceje
03rd Mar 2021 16:22

"For periods starting on or after 1 May 2021, you can put the employee on furlough as long as they were employed by you on 2 March 2021, as long as you have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 2 March 2021." updated today https://www.gov.uk/guidance/check-which-employees-you-can-put-on-furloug...

Thanks (0)
Morph
By kevinringer
03rd Mar 2021 17:06

SEISS4 requires the submission of the 2019-20 tax return. Are we to assume the 80% of 3 months' average profits will be 2019-20. Section 2.15 of the Red Book which covers SEISS4 doesn't say.

Thanks (0)
Replying to kevinringer:
blue sheep
By Nigel Henshaw
03rd Mar 2021 17:13

kevinringer wrote:

SEISS4 requires the submission of the 2019-20 tax return. Are we to assume the 80% of 3 months' average profits will be 2019-20. Section 2.15 of the Red Book which covers SEISS4 doesn't say.

I assumed they would move the calculation forward a year so it would be average for 3 years to 5th April 2020

Thanks (1)
Replying to NH:
avatar
By ianmac2509
03rd Mar 2021 18:03

Or alternatively, average of 4 years 2016/17, 2017/18, 2018/19 & 2019/20......who knows!

Thanks (1)
Replying to ianmac2509:
Morph
By kevinringer
03rd Mar 2021 19:20

You were right Ian, just been posted on the Agent Forum:

'The UK Government will pay a taxable grant which is calculated based on 80% of three months’ average trading profits, paid out in a single payment and capped at £7,500 in total. The value of the grant is based on an average of your client’s trading profits for up to four tax years between 2016 to 2020, where available.'

Thanks (0)
Morph
By kevinringer
03rd Mar 2021 17:11

Do we know how the SEISS5 turnover test will operate? What periods are compared? Section 2.16 of the Red Book doesn't say. It can't be based on VAT returns because currently you don't have to be VAT registered for SEISS.

SEISS1+2+3+4 are claimed by partners based on each partner's profit share: each partner's claim is independent. How will the turnover test apply to partnerships?

Thanks (0)
Replying to kevinringer:
avatar
By Paul Crowley
03rd Mar 2021 17:33

Had not thought of partnerships.
We do not now have many of them

Thanks (0)