There have been many predictions of market crashes, recessions and a great depression looming in the next few years and many people have been anxiously awaiting Chancellor Rishi Sunak’s 2021 budget briefing. Join Mark today as he depicts the budget and explains what this means for you.
– It is going to take a while for the economy to recover. The first thing the chancellor Rishi Sunak has said is that there will be no increase on income tax, national insurance or VAT, however he will freeze the nil rate allowance which typically rises every year. He will also freeze the top tax rate. These strategies are a slightly less visible way of taking the money back, and it does not happen straight away.
– Many people thought that the capital gains tax rates would go up however Rishi stayed silent on this matter.
– Unlike reports of corporation tax going up to 23% he is going to raise the rates to 25%. This rise will not be seen until 2023.
– The big news in the property world is the stamp duty holiday extension. This and the 90% mortgage guarantee will support the lower end of the property market. With all the government support it seems less likely that the market will crash.
– All the schemes have given consumers a lot of savings to spend, there is a huge amount of money in savings accounts and as the economy opens up, they are going to go and spend that money and there is likely to be some inflation. As inflation picks up, you could see inflation rise by 3%-5%.
– “It is probably an even bigger hit since world war 2 with the amount the economy has shrunk.”
– “Loads of people have cash in their pockets.”