Budget 2021: Which expected policies were not announced?
Rishi Sunak’s Budget was a tale of two halves, with the chancellor spending big over the next two years before implementing a series of tax rises in the years after.
Many of the policies announced were already leaked days or weeks in advance, with the corporation tax rise to 25 per cent for the UK’s largest firms expected in some form or another.
However, there were other touted tax rises that the UK managed to avoid this time around.
City PM takes a look at some of the rumoured measures that were not announced.
Online deliveries tax
It was reported just days ago that the chancellor would look to hit digital retailers with an online deliveries tax in today’s Budget to help pay for the UK’s £400bn of Covid spending.
It was rumoured that Sunak wanted to raise tax revenues from online retailers like Amazon and Asos who have both seen profits skyrocket during the pandemic.
The chief executives of major supermarket chains Tesco and Asda in January also called for a new online sales tax on digital retailers and to slash business rates to help High Streets.
However, Sunak instead decided to force big businesses of all stripes to pay for much of the country’s Covid spending through his targeted corporation tax increase.
Capital Gains Tax hike
Another rumoured tax increase was on a hike on Capital Gains Tax that would have acted as an effective tax on wealth.
The Office for Tax Simplification undertook a review of the tax last year, telling Sunak to increase the rate of capital gains tax and slash exemptions to take away the “odd incentives” of the current system.
The body called for tax rates to be brought in line with income tax and for the threshold at which you begin to pay the tax to be lowered.
These moves could have brought in more than £14bn in extra government revenue.
Self-employed taxes
The Budget was also expected to include plans to increase National Insurance contributions by self-employed Britons.
This was a move that Sunak touted last year when he announced a new Covid support scheme for self-employed workers.
He said: “It is now much harder to justify the inconsistent contributions between people of different employment statuses. If we all want to benefit equally from state support, we must all ‘pay in’ equally in future.”