During last week's Budget 2021, Chancellor Rishi Sunak announced a three-point plan which would protect jobs and strengthen public finances, and set aside billions to support everyone through the pandemic and beyond ...
Here's my summary of the key points:
Plan to support, protect and create jobs
The Chancellor announced a further £65bn in support for furlough, self-employed support, business grants, loans and VAT cuts. The total support to business will be around £400bn since the start of the pandemic.
Furlough has been extended until the end of September with the Government continuing to pay 80% of employees' wages. SEISS has been extended to match with 600,000 more self-employed people becoming eligible for support.
The £20 a week uplift in Universal Credit continues and Working Tax Credit claimants will get a £500 one-off payment. In addition, the minimum wage has been increased to £8.91 from April.
Taxation
Thankfully, the Chancellor didn't announce any uplift in Income Tax, National Insurance or VAT, although he did freeze the thresholds which will mean more people will pay the higher rate over time.
Corporation Tax does rise from 19% to 25% in two years for businesses with profits greater than £250,000. This is good news for smaller businesses with profits less than £50,000 and the two-year phase-in means larger businesses will have time to prepare for the new scaled rate.
The Stamp Duty holiday has been extended into June meaning no tax is charged on sales where the property is valued less than £500,000. Other thresholds such as Inheritance Tax, Pensions allowances and Capital Gains Tax exemptions are frozen until 2025-26.
Health and education
The Chancellor has included an extra £1.65bn for the vaccination rollout and another £50m for the testing programme. Domestic violence programs and funding for homeless women's refuges get £19 and there's £10 for veteran's mental health support.
Arts and sport
There's £400m to help support arts venues in England which include museums and galleries, allowing them to re-open when permitted. £300m was announced for professional sport and £25m for grassroots football. The Chancellor even announced £1.2m to help stage the delated Women's Euros tournament in 2022.
Business, digital and science
There will be new tax breaks for businesses to unlock £20bn worth of new business investments. They will be able to deduce investment costs from tax bills and there'll be incentives for firms to take on new apprentices.
The Chancellor also confirmed the lower 5% VAT rate for hospitality businesses will continue until September and an interim 12.5% will apply for the next 6 months.
Business rates holidays will continue until June, there are £5bn Restart grants for businesses forced to close and grants of up to £18,000 for non-essential outlets due to reopen in April.
Alcohol, tobacco and fuel
Alcohol duties have been frozen for another year with no extra tax on spirits, wine, cider or beer. The same goes for fuel duty and no further tobacco duties were announced after the rise in November.
Environment, transport, infrastructure and housing
We will soon have a new UK Infrastructure Bank which will be set up in Leeds with £12bn in capital and the aim of funding £40bn worth of public and private projects. There will also be £15bn in green bonds to help finance the transition to net-zero by 2050.
I do feel that what the Chancellor announced in Budget 2021 will be very positive for many of our clients and that these points will help to kickstart the economy as the country unlocks after the pandemic.
If you feel inspired to find out more about anything I've said here, do call me on 01908 774320 or leave a comment below and I'll be in touch as soon as I can.