A SUMMARY OF THE BUDGET 2021
Chancellor Rishi Sunak revealed the Budget in the House of Commons on Wednesday 3rd March 2021.
He announced new measures to help business and jobs through the pandemic and to support the UK’s long-term economic recovery and a series of tax-raising plans to help rebalance the public finances.
Here is a summary of the main points.
The Economy and Public Finances
The UK economy shrank by 10% in 2020
The economy is set to rebound with a predicted annual growth of 4% in 2021
The economy is forecast to return to pre-Covid levels by mid 2022, with a predicted growth of 7.3% next year
700K people in the UK have lost their jobs since the pandemic began
Unemployment levels are expected to peak at 6.5% next year, lower than 11.9% as previously predicted
UK is to borrow a record of £355bn this year, borrowing totalling £234bn in 2021-2022
Coronavirus Job Retention Scheme (Furlough) has been extended until the end of September 2021. The government will pay 80% of the employees’ wage and from July the employer will have to contribute 10%, then from August the employer will have to pay 20% throughout August and September.
Support for Self-Employed will also be extended until September.
600,000 more self-employed people will now be eligible for help as access to the grants has been widened.
Minimum wage will increase to £8.91 per hour from April for age 23+
There will be no changes to rates of income tax, national insurance or VAT (yet)
Tax-free personal allowance will be frozen at £12,570 from April 2021 to 2026
Higher rate income tax threshold to be frozen at £50,270 from April 2021 to 2026
Corporation tax on company profits above £250,000 to rise from 19% to 25% in April 2023
Rates to be kept at 19% for around 1.5 million smaller companies with profits of less than £50,000
Stamp duty holiday on house purchases in England and Norther Ireland has been extended to 30th June 2021
No tax charged on sales of less than £50,000
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 and a funding network of respite rooms for homeless women
£40m of new funding for victims of 1960s Thalidomide scandal and a lifetime support guarantee
£10m to support armed forces veterans with mental health needs
The Arts and Sports
£400m to help arts venues in England, including museums and galleries
£300m recovery package for professional sport and £25m for grassroots football
£1.2m to help stage the 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 to “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 internships
Lower VAT rate for hospitality firms to be maintained at the 5% rate until September, after which an interim rate of 12.5% will apply for the following six months
Business rate holidays for firms in England to continue until June with 75% discount after that
£5bn in Restart grants for shops and other businesses in England that have been forced to close
£6k per premises for non-essential outlets due to re-open in April and £18k 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 the second year running
No extra tax on spirits, wines, cider and beer
Fuel duty to be frozen for eleventh consecutive year
Tobacco duties rose in November 2020 but no further rise is in this Budget
Environment, Transport and Construction
New UK Infrastructure bank to be set up in Leeds
It will have £12bn in capital, with the aim of funding £40bn worth of public and private projects
£15bn in green bonds, including retail investors, to help finance transition to net zero by 2050
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