The chancellor Rishi Sunak delivered his second Budget setting out three-point plan to protect jobs, fix the public finances and build the future economy.
- The furlough scheme is extended until the end of September. Government will continue paying 80% of employees’ wages for hours they cannot work until end o June. The employers will be asked to contribute 10% in July and 20% in August and September, towards the cost of covering employee’s wages.
- SEISS for self-employed is extended until September. Those whose turnover dropped by less than 30% will receive reduced support. Access for the self-employed to grants has been widened. Those who completed and submitted their 2019/20 tax return by 28th Feb 2021 will now qualify for Self Employment Support Scheme (SEISS) scheme.
- £20 weekly uplift in Universal Credit worth £1,000 a year to be extended for another six months.
- Working Tax Credit claimants will get a £500 one-off payment.
- Minimum wage to increase to £8.91 an hour from April.
- Reliefs for home office expenses, COVID tests and cycle exemptions have been extended.
- A new £150 million Community Ownership fund will give chance to community group to purchase local assets e.g. pubs, sport clubs, theatres etc whereas up to £250,000 matched funding will be provided
- No changes to income tax rates, thresholds, National Insurance, VAT.
- Personal allowances such as pension, savings, inheritance and CGT are all unchanged.
- Pension lifetime allowance has been frozen for 5 years. It will remain at its current level of £1,073,100 (2020/21) until 2026, rather than increasing in line with inflation.
- Tax-free personal allowance to be frozen at £12,570 until 2026.
- Higher rate income tax threshold to be frozen at £50,270 until 2026.
- Stamp duty holiday on house purchases in England and Northern Ireland extended until the 30th June.
- A new mortgage guarantee scheme to help first-time buyers access 95% mortgages, on property with a value up to £600,00.
- The corporation tax rate will increase from current 19% to 25% in April 2023 but only for the companies with profits of more than £250,000. A new small profits rate will be established at 19% for the companies with profits up to £50,000. The rate will be tapered from 19% to 25% on profits between £50,000 and £250,000.
- Tax treatment of losses has become more generous. Losses of up to £2m can now be carried back for 3 years.
- Introduction of a new Super Deduction means that from April 2021 companies can now reduce their tax bill by 130% of the cost of new plant and machinery and 50% of the cost of special rate assets.
- The reduced VAT rate of 5% for businesses such as restaurants, hotels and other leisure attractions, has been extended until the end of September, then an interim rate of 12.5% will apply from 1st of October to March 2022.
- The 100% Business rates holiday will be extended through to the end of June. After that there will be a 2/3rd reduction for the following 9 months.
- Incentive payments for hiring new apprentices are being doubled to £3,000 while £126m will be invested to triple the number of new traineeships.
- £5bn in Restart Grants will be available for shops and other businesses 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.
- A new Government loan scheme for businesses, 80% of which are backed up by the government are to run until the end of the year. Loans can range between £25,000 and £10m.
- Help To Grow Scheme announced to help small businesses increase productivity. It will provide free access to training courses on management and going digital. There are also 50% discounts on software packages to help increase productivity. Businesses need to register to access the help.
ARTS, SPORTS AND CULTURE
- £400m to help arts venues and museums in England re-open.
- £300m recovery package for professional sport and £25m for grassroots football.
- £2.8m pledged to help in the joint UK and Ireland bid to stage the 2030 World Cup.
- £1.2m to stage the delayed Women’s Euros football tournament in England in 2022
Environment, Nations, Regions and Other Announcements.
- £1.65 billion boost to aid the vaccine roll out.
- New Visas for highly skilled migrants to be made available.
- £10m pledged for mental health support for Veterans.
- An extra £19m in funding support for domestic violence programs.
- New UK Infrastructure Bank to be set up in Leeds.
- Funding for the devolved Governments: £1.2bn in funding for the Scottish government, £740m for the Welsh government and £410m for the Northern Ireland executive.
- Development of Freeports across the UK- Special Economic Zones- which allow companies importing and exporting from the UK to operate under simplified customs, tax, and planning rules. The first 8 in England listed: East Midlands Airport, Felixstowe and Harwich, Humber, Liverpool City Region, Plymouth, Solent, Thames and Teesside.
- £150m for community groups to take over pubs at risk of closure.
- £1bn fund to promote regeneration in a further 45 English towns, including Middlesbrough, Preston, Swindon, Bournemouth, Newark, West Bromwich and Ipswich.
- Green Savings Bonds – Savers will be able to buy into bonds offered through National Savings and Investments. These Government bonds will include investment in expanding offshore wind power plants, planting 30,000 trees and revamping UK homes and public transport.
- Increase in contactless payment limit to £100
For any further information and support get in touch with our consultants at email@example.com