Thursday, March 4, 2021
The UK has now been in lockdown, on and off, for the best part of a year. With the COVID-19 vaccination programme now in full swing in the UK, and hopefully with light at the end of tunnel, attention has inevitably turned to the question of “how are we going to pay for it all?”. Sweeping and significant tax rises have been feared and, following last year’s Office of Tax Simplification (OTS) review into capital gains tax (CGT), it was thought that an increase in CGT rates could well be on the cards.
But in Rishi Sunak’s budget announcement yesterday, aside from the deferred increases in the rate of corporation tax (discussed below), there were no such immediate tax rises. At least for now, the government’s predominant short term focus appears to be on policies intended to stimulate growth and investment – highlighted by the new super deduction for capital investment costs.