Archive, March 2021: This report summarises that year’s Budget announcements. Tax rules and support schemes have changed; check current government tax guidance.

On 3 March 2021, Chancellor Rishi Sunak announced the UK Budget, including tax measures and pandemic support.

Here is a summary of selected announcements made at the time:

Furlough scheme – extended until end of September

The Coronavirus Job Retention Scheme was extended until the end of September 2021. Employers were asked to contribute 10% of wages for unworked hours in July and 20% in August and September, in addition to employer National Insurance and pension contributions.

Furloughed employees were entitled to 80% of their reference wages for unworked hours, up to £2,500 a month for full furlough; the cap was proportional to hours not worked. See HMRC’s 2021 guidance.

New support for the self employed – now including newly self employed
The fourth Self-Employment Income Support Scheme grant covered February to April 2021 and could be claimed from late April. It was worth 80% of three months’ average trading profits, capped at £7,500 in total. Those who had filed a 2019–20 tax return could qualify for the first time, subject to the other eligibility rules. A fifth grant covering May to September was also announced, with its value depending on the fall in turnover.

£5bn fund in new grants for businesses

The government announced £5 billion of new business grants in England, including Restart Grants to help eligible premises reopen.

Eligible non-essential retail premises could receive up to £6,000 each. Hospitality, accommodation, leisure, personal care and gym premises could receive up to £18,000 each.

Local authorities distributed the one-off grants from April 2021, subject to eligibility. See the government’s scheme guidance.

Hospitality sector VAT cut extended

The temporary hospitality and tourism VAT rate was extended at 5% until 30 September 2021, followed by 12.5% until 31 March 2022. HMRC’s guidance explains the rates and affected supplies.

Arts, culture and sport

The chancellor announced around £700 million to support arts, culture and sport, and government backing for a proposed joint UK and Ireland bid to host the 2030 World Cup.

Universal credit – £20 uplift extended

The temporary £20 per week increase to the Universal Credit standard allowance was extended for six months in Great Britain; the Northern Ireland Executive was funded to match it.

Income tax – proposed freeze of personal tax thresholds

The standard personal allowance rose to £12,570 in 2021–22, and the Budget proposed freezing it through 2025–26. The higher-rate threshold rose to £50,270 for non-savings, non-dividend income in England, Wales and Northern Ireland, with the same proposed freeze. Scottish income tax rates and thresholds differed.

Business rates

The 2021 Budget extended full business rates relief for eligible retail, hospitality and leisure properties in England until the end of June 2021, followed by two-thirds relief through March 2022, subject to caps.

£19m for domestic abuse programmes

The Budget allocated an additional £19 million to tackling domestic abuse: £15 million for perpetrator programmes in England and Wales and £4 million to trial respite rooms in England for homeless women facing severe disadvantage.

Mortgage guarantee scheme

A new UK-wide scheme offered participating lenders a government guarantee on eligible high loan-to-value mortgages. It was open to eligible first-time buyers and existing homeowners buying a property worth up to £600,000 with a deposit as low as 5%. The guarantee protected the lender against part of its losses; it did not cover the buyer’s repayments.

It is based on the Help to Buy mortgage guarantee scheme, which closed to new loans at the end of 2016.

The scheme was announced for launch in April 2021, with the aim of increasing the availability of high loan-to-value mortgages.

Stamp duty holiday extended

In England and Northern Ireland, the residential Stamp Duty Land Tax nil-rate band was extended to £500,000 until 30 June 2021, then set at £250,000 until 30 September before returning to £125,000 on 1 October. Higher rates could still apply to some purchases.

Vaccine rollout funding

The government allocated a further £1.65 billion for the 2021–22 vaccine deployment programme in England.

Apprenticeship and traineeship incentives

In England, the Budget announced £3,000 for employers hiring a new apprentice between 1 April and 30 September 2021, subject to eligibility. A separate £1,000 employer payment was available for traineeship work placements. See the education statistics.

Recovery loan scheme

The Recovery Loan Scheme opened in April 2021. The Budget described eligible loans of up to £10 million, with an 80% government guarantee to the lender. The borrower remained liable for the full debt. See the British Business Bank’s 2021 announcement.

Beer duty frozen 

Beer duty was frozen for the second year in a row.

Fuel duty frozen 

Fuel duty was frozen for the 11th year in a row.

Corporation tax increased

The Budget announced that the main corporation tax rate would rise from 19% to 25% in April 2023. A 19% small-profits rate and marginal relief also applied, depending on profits and other conditions. See HMRC guidance.

Read more detail on the UK government website at gov.uk/government/news/budget-2021-what-you-need-to-know