Tax | Statutory Audit | Accounting
The UK economy has proved more resilient to the shocks of the pandemic and energy crisis. Even so, inflation has been more persistent and interest rates higher than expected. Higher inflation increases the Government's tax-take and the OBR have produced forecasts showing a rosier outlook for public finances, which the Chancellor took as the green light to reduce NICs' taxation, leaving debt falling by a narrow margin in five years.
The OBR report that the economic and fiscal outlook has brightened since November 2022. In the comming year, the downturn is likely to be shallower. In his Spring Budget The Chancellor has spent two-thirds of the believed improvement in the Government's finances on support for energy costs, business investment and 'free childcare'.
Additional Government support over the next two years cushions the shock for consumers of the energy crisis – but the OBR predict the UK economy suffers a recession with living standards falling over the next two years. Underlying forecast changes of £55 billion on average for each year of the next five years , add to borrowing. Tax rises and (later) spending cuts offset much higher debt interest to have debt falling as a share of GDP.
Two years to the day of the ‘national lockdown’ Chancellor, Rishi Sunak made a ‘Spring Statement’ to Parliament. The OBR say that public finances have emerged from the pandemic in better shape than expected. Yet existing inflationary pressures are exacerbated by Russia’s invasion of Ukraine. UK inflation will likely increase to a 40-year high. With around £30 billion of headroom against fiscal targets, the Chancellor eased back future tax increases.
In March 2021, Rishi Sunak announced the highest tax increases since Norman Lamont’s Budget 28 years ago. The former Chancellor Lord Lamont warned that the current finance minister would be likely to have to increase taxes again if he wanted to attempt to balance day-to-day spending and revenue...
On Wednesday 3rd March 2021 the Chancellor, Rishi Sunak, presented presented to Parliament the 2021 Budget The OBR predict the UK economy is set to rebound thanks to rapid vaccine rollout, with faster economic recovery over the next two years led by an extension of the furlough scheme, rebounding levels of consumption boosted from households’ savings and much stronger business investment supported by generous tax incentives. Although with risks remaining from the virus, historic levels of public debt and future interest rates.
On Wednesday 25th November 2020, the Chancellor, Rishi Sunak, presented the Office for Budget Responsibility’s economic and fiscal outlook: The coronavirus pandemic will have caused the UK economy to contract by an estimated 11% accross 2020. Government spending on public services and schemes to support employment surged, pushing up the deficit at least seven fold to around £400 billion (highest deficit-borrowing since 1944) leading to UK Government Net Debt projected to be above 100 per cent of GDP for the first time since 1960.
On Wednesday 11th March the second new Chancellor, Rishi Sunak, presented the first Budget since the UK formally left the EU on the 31st January 2020. The largest sustained fiscal loosening since 1992. The plan was to take real day-to-day spending per person back to pre-austerity levels with an “infrastructure revolution”. As Mr Sunak prepared for the Budget, the UK economy appeared to be on the up, with business and consumer optimism increasing and a recovery in retail sales.That was until the devistating effect of coronavirus.