On Wednesday 3rd March 2021, Chancellor of the Exchequer Rishi Sunak announced a Budget which ‘meets the moment’, setting out a £65 billion three-part plan to provide support for jobs and businesses.
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.
Here is a summary of the main points.
The UK government have set out extensions to the furlough scheme, business rates relief, the £20 uplift to weekly Universal Credit payments and the stamp duty holiday there will however be a great increase on taxes
- Corporation tax will rise from 19 per cent to 25 per cent in April 2023 for all businesses with profits over £50,000.
- Smaller companies with profits under £50,000 will still be able to benefit from the 19 per cent tax rate. In total, only 10 per cent of companies are expected to have to pay the higher tax rate
- The UK will still have the lowest rate in the G7 according to Sunak.
- The thresholds on income tax will be frozen until 2026
- This is expected to cost the people of Britain £8 Billion
The Furlough scheme is going to
- The government will continue paying 80 per cent of employees’ wages, up to £2,500 to be extended to September
- Employers will then be asked to pay 10 per cent of wages paid out through the scheme
- The self employment scheme will also be extended to September
Business rate reliefs
There will be Business rates relief for the retail and hospitality sectors and others who have been greatly affected, the scheme has been extended for three months until June. For the remaining nine months of the year, business rates will be discounted by two-thirds.
The government unveiled a new £5bn Restart Grants Scheme, that will give companies grants of up to £18,000 to help boost them at this time of need.
The Recovery Loans Scheme will offer loans from £25,000 to £10m up to the end of the year
The VAT cut to five per cent for the hospitality, accommodation and attractions sectors will be extended until the end of September. The rate will then be 12.5 per cent for a further six months