LONDON: Chancellor Rishi Sunak unveiled the contents of his Budget in the House of Commons ON Wednesday. Setting out the government’s tax and spending plans for the year ahead, 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, BBC has reported.
Here is a summary of the main points.
Coronavirus support
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
600,000 more self-employed people will be eligible for help as access to grants is widened
£20 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
State of the economy and public finances
UK economy shrank by 10% in 2020
Economy forecast to rebound in 2021, with projected annual growth of 4% this year
Economy forecast to return to pre-Covid 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
Taxation
No changes to rates of income tax, national insurance or VAT
Personal income tax allowance to be frozen at £12,570 from April 2022 to 2026
Higher rate income tax threshold to be frozen at £50,270 from 2022 to 2026
Corporation tax on company profits 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 June, with no tax liability on sales of less than £500,000
No changes to inheritance tax or lifetime pension allowance or capital gains tax allowances
Health and education
£1.65bn to support the UK’s vaccination rollout
£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
£400m to help arts venues in England, including museums and galleries, re-open
£300m recovery package for professional sport and £25m for grassroots football
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%
Incentive grants for apprenticeships to rise to £3,000 and £126m for traineeships
VAT rate for hospitality firms to be maintained at reduced 5% rate until September
Interim 12.5% rate to 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 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
All alcohol duties to be frozen for second year running
No extra duties on spirits, wine, cider or beer
Fuel duty to be frozen for eleventh consecutive year.