The Chancellor Rishi Sunak has unveiled his Budget to the House of Commons this week.
The Budget sets 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 furlough scheme will be extended until September at the current rate of 80%. Employers to be asked to contribute 10% in July and 20% in August and September.
- The £20 uplift in Universal Credit worth £1,000 a year to be extended for another six months and Working Tax Credit claimants will get £500 one-off payment.
- The Minimum wage to increase to £8.91 an hour from April.
- No changes to rates of income tax, national insurance or VAT.
- Personal income tax allowance to be frozen at £12,570 from 2022 to 2026 and 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 but rates are to be kept at 19% for about 1.5 million smaller companies with profits of less than £50,000.
- The current Stamp duty holiday will be extended to June, with no levy on sales of under £500,000. Until September the nil rate band will reduce to £250,000.
- No changes to inheritance tax or lifetime pension allowance or capital gains tax allowances
- Firms will be able “deduct” investment costs from tax bills, reducing costs by 130%.
- Incentive grants for apprenticeships to rise to £3,000 and £126m for traineeships.
- The VAT rate for hospitality firms to be maintained at 5% until September and then a interim 12.5% rate to apply for the following six months.
- Businesses will continue to benefit from a rates holiday in England until June with 75% discount after that.
- £5bn in re-opening grants for non-essential businesses worth up to £6,000 per premises.
- All alcohol duties to be frozen for second year running, this means no extra duties on spirits, wine, cider or beer.
- Good news for motorists, the fuel duty to be frozen for tenth consecutive year.
- A new Mortgage guarantee scheme to help people with small deposits get on the housing ladder will be available, which means many high street banks from April will offer new 95% mortgage deals. Please note your home may be repossessed if you do not keep up with your mortgage repayments.
This is not a full list and the fine print is still being looked at. If in doubt do check the Gov website for more information or speak to your tax / financial adviser.
This article is for information purposes only – should not be perceived as financial advice.