Autumn Budget 2021: expectations

Chancellor Rishi Sunak will deliver his Autumn Budget speech in the House of Commons this afternoon, which is expected to be focused on restoring confidence in public finances following the COVID-19 pandemic and amid an increasing cost of living.

The Autumn Budget comes six months after the Spring Budget 2021, which saw Sunak schedule an increase in corporation tax for 2023 and a freeze of the income tax personal allowance from 6 April to 5 April 2026.

Sunak is expected to tell the House taxes need to be increased to tackle the UK debt, which currently stands at around £2.2 trillion, and keep inflation down, although he will announce an increase to the minimum wage for those aged over 23 to £9.50 an hour.

The Chancellor is also expected to increase council tax by up to 5 percentage points to help fund additional spending in the health and social care sectors, after increasing National Insurance contributions by 1.25 percentage points for the same purpose in September.

The Chancellor is also likely to announce a green gas levy as part of the Government's drive to reach ‘net zero' in the lead up to the upcoming COP26 climate summit.

A surcharge is currently applied to household electricity bills, but could be transferred to gas bills as a way to encourage people to opt for more eco-friendly boiler options.

This would, however, add hundreds of pounds onto already skyrocketing energy bills, increasing speculation that Sunak could cut the 5% VAT rate of household energy bills, costing the Treasury around £1.5 billion a year.

We will update you on any new measures.

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