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The Budget 2021

The Chancellor of the Exchequer has delivered his Budget Statement to the House of Commons. Below is a summary of the announcements in his speech. The main Budget documents can be downloaded here.

Coronavirus


Support for people and welfare

  1. Universal Credit – Six month extension of the £20 weekly Universal Credit uplift, and a £500 one off payment for those receiving Working Tax Credits

Housing support

  1. Stamp Duty – £500,000 Stamp Duty Land Tax nil rate extended by three months until end of June 2021, decreasing to £250,000 until the end of September 2021, returning to £125,000 level from 1st October 2021

  2. Mortgage Guarantees – Government to provide lender guarantees on 95% mortgages where buyers can only afford a 5% deposit

Support for Business

  1. Furlough Scheme – Extended until the end of September 2021. Businesses will be asked to contribute 10% of the wages of those on furlough in July and 20% of the wages of those on furlough in August and September

  2. Self-Employed Grants – Two further grants for the self-employed – a fourth grant covering the period February, March, April at 80% of average trading profits; and a fifth and final grant covering the period May, June, July, at 80% for those whose turnover has reduced by 30% or more, or 30% for those whose turnover has reduced by less than 30%. The grants can be claimed by those who filed tax returns for the 2019/20 financial year, by midnight last night (2nd March 2021)

  3. Apprentices – Incentive payments for businesses to take on apprentices of any age doubled to £3,000 per new apprentice

  4. Retail Restart Grants – Up to £6,000 per non-essential retail premises on reopening

  5. Hospitality Restart Grants – Up to £18,000 for hospitality and leisure businesses reopening later

  6. Arts, Culture and Sport – £700m for arts, culture and sporting institutions as they reopen

  7. Government-backed Loans – 80% Government guarantee for lenders of loans of between £25,000 and £10m for businesses of any size

  8. Business Rates – 100% Business Rates holiday for retail, hospitality and leisure sectors extended by three months up until the end of June 2021, and then a 66.6% Business Rates holiday until the end of March 2022 (up to a value of £2m for closed businesses, and a lower cap for those who remained open)

  9. Hospitality VAT Rate – 5% reduced rate of VAT for hospitality and tourism extended for six months until the end of September 2021, with an interim rate of 12.5% for a further six months until end of March 2022

Health support

  1. Vaccinations – Additional £1.6bn for continued rollout of vaccination programme and to improve future preparedness

Post-Coronavirus measures


Tax

  1. Income Tax thresholds – Personal allowance threshold frozen for a year, raised to £12,570 in April 2021, then retained at this level until April 2026. The higher rate threshold will be increased to £50,000 remaining at this level until April 2026

  2. Inheritance tax threshold, pensions lifetime allowance, Capital Gains Tax annual exempt amount – Maintained at current levels until April 2026

  3. VAT registration threshold – Maintained at current level from April 2022 to April 2024

  4. Corporation Tax – Increasing to 25% from April 2023. New Small Profits Rate for businesses with profits of up to £50,000 who will pay the current rate of 19%, with the rate tapering up to 25% for profits of up to £250,000

  5. Losses – Businesses can carry back losses of up to £2m for three years, enabling affected businesses to claim tax refunds of up to £760,000

  6. Bank surcharge – Government to review 8% bank surcharge to ensure combined rate of tax on UK banking sector doesn’t increase significantly from current level and remains internationally competitive

  7. Investment super-deduction – Businesses that spend on investment can reduce their tax bill by 130%

  8. Alcohol duties – Planned increases in all alcohol duties cancelled and alcohol duties frozen

  9. Fuel duty – Planned increase cancelled

Support for Business

  1. UK Infrastructure Bank – To be located in Leeds, with an initial capitalisation of £12bn beginning in Spring, with the expectation it will support at least £40bn of total investment in infrastructure

  2. Offshore Wind – Government to fund new port infrastructure to build next generation of offshore wind projects in Teesside and Humberside

  3. Sustainability – Dame Clara Furse to establish a new group to position the City of London as the global leader for voluntary high carbon offset markets

  4. Productivity: Help to Grow Management – New Help to Grow Management scheme to help businesses increase productivity through courses and mentoring for SMEs, with the Government contributing 90% of the cost of a new Executive Development Programme at business schools across the country

  5. Productivity: Help to Grow Digital – Free expert training and 50% discount on new productivity enhancing software worth up to £5,000 for SMEs, launching in the Autumn

  6. High Growth Innovative Companies – Two consultations launched on R&D Tax reliefs and Enterprise Management Incentives

  7. Visa Reforms – New unsponsored points based visa to attract best international talent in science, research and technology, new improved visa processes for scale-ups and entrepreneurs and radically simplified technology for high-skilled visa applications

  8. Funding for Innovative Companies – Pensions industry to be given more flexibility to unlock billions of pounds from pension funds into innovative new ventures; new Future Fund Breakthrough to be launched to fill the scale-up funding gap; and changes to the rules to encourage new companies to list in the UK

Further finance measures

  1. Green Savings – Government to launch a new retail savings product to give all UK savers the chance to support green projects

  2. Bank of England Remit Updated monetary policy remit, reaffirming 2% target, with a new remit to reflect the importance of environmental sustainability and transition to net zero.

Levelling up

  1. City Deals – Accelerated in Ayrshire, Argyll & Bute and Falkirk, North Wales, Mid-Wales and Swansea Bay

  2. Growth Deals – Funding for the Holyhead Hydrogen Hub, Global Centre of Rail Excellence in Neath Port Talbot, Aberdeen Energy Transition Zone, Global Underwater Hub and North Sea Transition Deal

  3. Devolved Funding – Barnett Formula implications of Budget increase funding by £1.2bn in Scotland, £740m in Wales and £410m in Northern Ireland

  4. Treasury Darlington Campus – New HM Treasury Economic Campus to be established in Darlington

  5. Towns Deals – £1bn for 45 new Towns Deals; National Infrastructure Commission asked to do a study on how to maximise the benefits of infrastructure policy and investment for towns

  6. Levelling Up Fund – First round launched, with applications invited from local areas across the UK

  7. Freeports – Eight freeport locations announced: East Midlands Airport, Felixstowe and Harwich, Humber, Liverpool City Region, Plymouth, Solent, Thames and Teesside

Welfare Support

  1. Domestic Violence – Additional £19m for domestic violence programmes to reduce risk of reoffending and pilot network of respite rooms

  2. Veterans – Additional £10m for Veterans mental health needs

  3. Thalidomide victims – Lifetime funding for those affected by the Thalidomide scandal, with initial funding pot of £40m