Chancellor Rishi Sunak has unveiled the contents of his Budget in the House of Commons.
An extension to the Chancellor’s flagship furlough scheme and more coronavirus support dominated one of the most anticipated Budgets in recent memory. Here’s a summary of the main tax and business measures. This guide will be added to over the next few days as more details emerge.
- Furlough to be extended until the end of September. Government to continue paying 80% of employees’ wages for hours they cannot work. Employers to be asked to contribute 10% in July and 20% in August and September.
- Support for the self-employed also to be extended until September. Sunak also confirms the self-employment income support scheme has also been extended. The fourth grant will cover February to April, worth 80% of average trading profits up to £7,500.
- £20 weekly uplift in Universal Credit worth £1,000 a year to be extended for another six months.
- Working Tax Credit claimants will get £500 one-off payment.
- Minimum wage to increase to £8.91 an hour from April.
- The chancellor confirms the £5bn restart grant for businesses to help companies get going after lockdown.
- As the government-backed bounce back loan (BBL) and coronavirus business interruption loan scheme (CBILS) come to an end, the Treasury is launching a new loan scheme to run until the end of the year. Loans can be between £25,000 and £10m.
- Hospitality and leisure businesses pay no business rates for three months, then rates will be discounted for the remaining nine months of the year by two-thirds, in a £6bn tax cut.
- 5% reduced rate of VAT will be extended until the end of September. Then it will be gradually increased, at 12.5% for six months, before returning to the standard rate from April 2022. Sunak says this is a cut worth £5bn.
State of the economy and public finances
- UK economy shrank by 10% in 2020.
- Economy forecast to rebound in 2021, with predicted annual growth of 4% this year.
- Economy forecast to return to pre-COVID-19 levels by middle of 2022, with growth of 7.3% next year.
- 700,000 people have lost their jobs since pandemic began.
- Unemployment expected to peak at 6.5% next year, lower than 11.9% previously predicted.
- UK to borrow a peacetime record of £355bn this year.
- Borrowing to total £234bn in 2021-22
- No changes to rates of income tax, national insurance or VAT
- Tax-free personal allowance to be frozen at £12,570 from April 2021 levels to 2026.
- Higher rate income tax threshold to be frozen at £50,270 from April 2021 levels to 2026.
- Corporation tax on company profits above £250,000 to rise from 19% to 25% in April 2023.
- Rate to be kept at 19% for about 1.5 million smaller companies with profits of less than £50,000.
- Stamp duty holiday on house purchases in England and Northern Ireland extended to 30 June.
- No tax charged on sales of less than £500,000.
- Inheritance tax thresholds, pensions lifetime allowances and annual capital gains tax exemptions to be frozen at 2020-2021 levels until 2025-26
Health and education
- £1.65bn to support the UK’s vaccination rollout and £50m to boost the UK’s vaccine testing capability.
- £19m for domestic violence programmes, funding network of respite rooms for homeless women
- £40m of new funding for victims of 1960s Thalidomide scandal and lifetime support guarantee
- £10m to support armed forces veterans with mental health needs.
The arts and sport
- Nearly £400m to help arts venues in England, including museums and galleries, re-open.
- £300m recovery package for professional sport and £25m for grassroots football
- £1.2m to help stage delayed Women’s Euros football tournament in England in 2022.
Business, digital and science
- Tax breaks for firms to “unlock” £20bn worth of business investment.
- Firms will be able “deduct” investment costs from tax bills, reducing taxable profits by 130%
- Incentives for firms to take on apprentices to rise to £3,000 and £126m for traineeships.
- Lower VAT rate for hospitality firms to be maintained at 5% rate until September.
- Interim 12.5% rate will then apply for the following six months.
- Business rates holiday for firms in England to continue until June with 75% discount after that.
- £5bn in Restart grants for shops and other businesses in England forced to close.
- £6,000 per premises for non-essential outlets due to re-open in April and £18,000 for gyms, personal care providers and other hospitality and leisure businesses
- New visa scheme to help start-ups and rapidly growing tech firms source talent from overseas.
- Contactless payment limit will rise to £100 later this year.
Alcohol, tobacco and fuel
- All alcohol duties to be frozen for second year running.
- No extra tax on spirits, wine, cider or beer
- Fuel duty to be frozen for eleventh consecutive year.
- Tobacco duties to rise by inflation plus 2%
Environment, transport, infrastructure and housing
- New UK Infrastructure Bank to be set up in Leeds.
- It will have £12bn in capital, with aim of funding £40bn worth of public and private projects.
- £15bn in green bonds, including for retail investors, to help finance the transition to net zero by 2050.
Nations and regions
- £1.2bn in funding for the Scottish government, £740m for the Welsh government and £410m for the Northern Ireland executive
- 750 UK civil servants to be relocated to new Treasury campus in Darlington.
- £1bn fund to promote regeneration in a further 45 English towns, including Middlesbrough, Preston, Swindon, Bournemouth, Newark, West Bromwich and Ipswich
- £150m for community groups to take over pubs at risk of closure.
- First eight sites announced for freeports in England: East Midlands Airport, Felixstowe and Harwich, Humber, Liverpool City Region, Plymouth, Solent, Thames and Teesside
Request a call back
BUY TO LET ADVICE
HOUSE – FIRST TIME BUYER
CFO – FINANCIAL DIRECTOR
ACCOUNTANCY FOR VISA
How can we help you?
Visit our offices in London or call us to discuss your needs. We can you achieve success!Call us now