You can read about the full extent of the giveaways in our Budget coverage here – unsurprisingly, given the extent to which it underpins the nation’s economic feel-good factor, keeping the property market ticking over remains a key pillar of the government’s economic plans, along with masses of financial support to help businesses and the self-employed keep the wolf from the door. Even a proposed 6 per cent increase in corporation tax for larger businesses, to 25 per cent, will not happen for several years, and has been offset by a ‘super-deduction’ tax that will allow companies to offset their tax against capital investment. As Chris Dillow observes, that essentially means the government will be paying companies to invest over the next two years.
That will at least reverse some of the damage done to business investment by the pandemic, and will allay the concerns of some economists that a focus on tax rises to cut the deficit could choke off a recovery before it even began. However, as Chris notes, the effect could be temporary, and does not mean capital will be allocated wisely. And while personal tax rates will not rise imminently, the freezing of many thresholds leaves many exposed to the threat of rising inflation – and with Tax Day on 23 March and an Autumn statement to come it may be too early to count one’s chickens when it comes to possible changes to capital gains tax and the lingering threat of wealth taxes.