Webinar: Analysing the 2021 UK Budget
On 10 March, the UK India Business Council (UKIBC) hosted a webinar focused on the 2021-22 UK Budget.
UKIBC Marketing Manager Emma Lynch led the conversation in which Director Chris Heyes analysed the details and impact of Chancellor Rishi Sunak’s Budget alongside experts Loknath Mishra, Managing Director and CEO at ICICI Bank UK Plc, and Arvinder Matharu, Tax Director at Prager Metis LLP.
Loknath began the conversation by observing the budget from a macroeconomic perspective. He expressed overall content with the budget, which will allow the economy to recover with a focus on jobs, supporting companies as they reopen, and reviving sentiments around consumer investing and investment by companies. Despite a significant increase in borrowing, the low interest rate environment is still favourable, and the interest pay out for the government is still lower.
Loknath added two possible risks with the budget. The first being that everything works well and the economy sees a massive rebound – though the downside here would be an increase of inflation. The second risk is if the virus does not get controlled and results in a third surge. Loknath was optimistic of the UK’s vaccine progress and noted the second scenario is unlikely.
Arvinder reviewed the new corporation tax rates which will increase from 19% to 25%, although this will not go into effect until April 2023 and will only be applicable to medium to large corporates. Arvinder then addressed the new super-deduction capital allowance for companies, which aims to encourage companies to invest their cash into themselves, and therefore the economy.
Arvinder explained the temporary extension to carry back of trading losses, and went on to discuss Mr Sunak’s announcement of the creation of freeports. These freeports will be national hubs for global trade and investment across the UK and present a variety of customs and tax benefits. For Indian businesses investing in the UK, Arvinder advised considering freeports, utilising the R&D tax credit, and super-deduction.
Concluding his presentation, Arvinder spoke on the direction of travel for the UK. This ‘investment-led recovery’ will need to be promoted not only through tax reliefs, but also with non-tax initiatives such as funding for companies working in life sciences, clean technology, and other areas. He added the benefit of reforming the immigration system to attract the brightest and best international talent. If we create an environment of growth, the tax revenue will follow.
Many thanks to our brilliant speakers for providing their time and resources for this webinar. If you were unable to join our session on the day, or would like to go through the webcast again, we invite you to watch the webinar below for the discussion in full.