Budget 2021 – The UK Chancellor Rishi Sunak has announced his hotly anticipated budget which includes more funding for businesses, new tax changes and initiatives to boost the economy.
Here’s a roundup of the some of the key announcements:
Furlough scheme – extended until end of September
The government said in December the furlough scheme had been extended until the end of April 2021. The Coronavirus Job Retention Scheme has now been extended until the end of September, with employers asked to contribute to workers’ salaries from July. From then, employers will be expected to contribute 10%, increasing to 20% in August and September, as the economy reopens.
Employees will continue to receive 80% of their salary for hours not worked until the scheme ends.
£5bn fund in new grants for businesses
A £5bn scheme for high street shops and hospitality firms in England has been unveiled ahead of the budget, worth as much as £18,000 per firm, which will help them reopen as England eases the lockdown.
Non-essential retail who are due to reopen first will receive up to £6000 in grants.
Nearly 700,000 shops, restaurants, hotels, hair salons, gyms and other businesses in England, will be eligible for the so-called “restart grants”, to be distributed directly to firms by local authorities from April. It will replace the current monthly grant system.
Hospitality sector VAT cut extended
Already extended once, the temporary reduction in VAT from 20% to 5% due to end on 31st March will be extended to 30th September 2012. After that an interim rate will apply of of 12% and the standard VAT rate will then return in April 2022.
Arts, culture and sport
The chancellor says sporting, cultural and arts organisations will get £700m to help them reopen. He also promises to back the joint UK and Ireland bid to host the 2030 World Cup.
Universal credit – £20 uplift extended
The Universal Credit uplift of £20 will be extended for a further for six months, until September 2021.
Income tax – freeze of personal tax threshholds
Thresholds have been frozen for the 20% basic rate of income tax and will go up to £12,570 as planned but will then be frozen until April 2026. The higher tax rate tax threshold at 40% will also go up to £50,270 as planned but will also be frozen until April 2026.
A business rates holiday launched last year to help firms ride out the virus crisis was due to finish at the end of March 2021. This has been extended for retail, hospitality and leisure businesses until the end of June. Business rates will then be discounted by two thirds until the end of the year.
£19m for domestic abuse programmes
An extra £19m support for domestic abuse support including safe respite care.
Mortgage guarantee scheme to help first time buyers
A new mortgage guarantee scheme will help buyers with a 5% deposit get on the property ladder. The initiative is aimed at helping those looking to buy a house of up to £600,000. The government will offer lenders the guarantee they need to provide mortgages that cover the other 95%.
It is based on the Help to Buy mortgage guarantee scheme, which closed to new loans at the end of 2016.
The scheme will be available to lenders from April, and is designed to increase the appetite of mortgage lenders to offer high loan-to-value lending to creditworthy customers across the UK. Housebuilders and estate agents could see increased demand for properties as a result.
Stamp holiday extended
The suspension of stamp duty on property sales of up to £500,000 was due to finish at the end of this March 2021. The Stamp Duty holiday has been extended by a further three months, until the end of June. The threshold will then be set at £250,000 – double the standard rate of £125,000, until the end of September. The standard threshold will then return on 1st October 2021.
Vaccine rollout funding
A further £1.65bn will be made available to help meet the government’s target for every adult to be offered a Covid jab by the end of July.
New traineeship scheme
£3000 for employers for new apprenticeships offered.
Recovery loan scheme
As the Bounce Back Loan scheme comes to and end, a new loan scheme will open for businesses. Amounts available will be £25,000 – £10m, 80% guaranteed by the UK government to lenders.
Beer duty frozen
The British Beer & Pub Association last month said a letter signed by 68 Conservative MPs had been sent to the Treasury, imploring Sunak to cut beer duty. Sunak has announced that beer duty will be frozen for the second year in a row.
Fuel duty frozen
Fuel duty has been frozen for the 11th year in a row
Corporation tax increased
Corporation tax will rise in April 2023 from 19% to 25%.
Read more detail on the UK government website at gov.uk/government/news/budget-2021-what-you-need-to-know