For those who might have missed it, the Chancellor, Rishi Sunak has announced that the date for the next UK Budget will be 3 March 2021. The Government had planned to hold a Budget in the Autumn but this was deferred in light of the impending second wave of the coronavirus pandemic.
The Budget will come against the most difficult economic backdrop seen in decades perhaps even since the last World War. The Office for Budget Responsibility (OBR) has forecast that this year, the economy will contract by 11.3%; the largest fall in output in over 300 years. As restrictions lift, it is forecast that growth will return by 5.5% in 2021 however the UK’s economic output will not return to pre-crisis levels until Q4 2022. The OBR expects unemployment to rise to a peak of 7.5% (2.6 million people) in the second quarter of next year. Unemployment is then forecast to fall in every year, reaching 4.4% by the end of 2024.
We will update you as we hear more about what measures might be announced. There could be significant tax changes ahead.