The Chancellor of the Exchequer Rish Sunak has given his Budget Speech in the House of Commons.
The speech was delivered in unprecedented times, with UK nations in lockdown as a result of the Coronavirus pandemic. Ahead of announcing measures in the Budget, the Chancellor set out a three-point plan for the Budget;
- To continue doing whatever it takes to support British people and businesses through the current crisis
- As the country moves towards recovery, plan for fixing public finances
- Begin the work of building our future economy
Here’s a look at the key announcements from the Budget, set out by the Chancellor…
Coronavirus support announcements
Furlough scheme extended until the end of September
The Furlough Scheme will be extended in the UK until the end of September.
There will no change to the terms for employees and those that are furloughed will continue to receive 80% of their salary, up to £2,500 a month.
Businesses will be asked to contribute to the cost of paying for hours their employees do not work as the country reopens, but not until July. From July, businesses will be asked to contribute 10% for the hours their employees do not work and in August and September, this contribution will be increased to 20%.
Support for self-employed to continue until September
Support for those who are self-employed will also continue until September through two further grants.
Those who are self-employed and have had their turnover fall by 30% or more as a result of the pandemic will receive 80% of their average trading earnings each month (capped at £2,500 per month) through two further grants.
The fourth grant will cover lost earnings through February, March and April and a fifth and final grant will be available covering lost income from June, July and August.
People whose turnover has fallen by less than 30% will only receive a 30% grant, due to them needing less taxpayer support.
Those who filed a tax return before the deadline on Tuesday night, including around 600,000 people who became self-employed last year, will be able to claim the grants.
Universal Credit uplift will continue for a further 6 months
The £20 weekly uplift in Universal Credit payments is to be extended for a further 6 months.
The uplift was introduced last April due to the impact of the Coronavirus pandemic. While it had been due to end on 31 March, it will now remain in place until September.
Grants and loans to help businesses reopen after lockdown
New grants will be made available to help businesses reopen following lockdown. Non-essential retail outlets, which will be allowed to reopen from April, will be able to receive a grant of up to £6,000 per premises. Businesses in the leisure and hospitality industries will be able to receive grants of up to £18,000 per premises.
£400m will be made available to support arts venues including museums and galleries reopening, while £300m will be made available for professional sport. £25m will be made available for grassroots football.
Businesses of any size will also be able to apply for loans from £25,000 to £10 million up until the end of the year
Tax support for businesses
The 5% rate of reduced VAT for tourism and hospitality businesses will be extended until the end of September. After this point, the rate will increase to 12.5% for 6 months – not returning to the normal rate until next year.
Business rates holiday for firms in England will continue through until June
National Living Wage increase to £8.91 an hour from April
The National Living Wage will be introduced to £8.91 an hour, up from the current rate of £8.72 an hour.
People need to be aged 25 or over to receive the National Living Wage. Workers aged under 24 are entitled to the National Minimum Wage, which varies depending on age bracket. Both rates are legal minimums that workers in the UK must receive for employment.
Funding for support programmes
An extra £19m will be made available for domestic violence programmes and for funding a network of respite rooms.
£40m of funding and a lifetime support guarantee will be made available for Thalidomide victims
An extra £10m will be made available to support veterans with mental health problems
The incentive payment for businesses taking on apprentices will be doubled to £3,000
Plans for fixing public finances
Tax changes in the coming years
The Chancellor announced that there will be no changes to rates of income tax, VAT or national insurance for workers.
The personal income tax allowance will increase next year to £12,570 but will then be frozen from 2022 to 2026. The higher rate income tax threshold will increase to £50,270 next year and will then be frozen at this level from 2022 to 2026.
Corporation tax for some companies on their profits will increase from 19% to 25% in April 2023. For small businesses with profits of £50,000 or less, the rate will stay at 19%, meaning most companies will be unaffected.
The planned increase in fuel duty has been cancelled.
Investment Super Deduction
When companies invest, they will be able to reduce their tax bill by 130% of the cost of the investment. The plans are expected to boost business investment by around 10%.
Building an economy for the future
Investment in infrastructure
A UK Infrastructure Bank will be set up and located in Leeds, designed to finance local authority and private sector infrastructure projects across the UK.
New investment will allow new port infrastructure to create the next generation of offshore wind farms Teesside and Humberside.
A new economic campus will be set up in Darlington.
Help to Grow Scheme
A Help to Grow Management scheme will allow tens of thousands of small businesses to receive world-class management training, 90% funded by the government
Help to Grow Digital will provide free digital training and offer 50% off productivity software
Science and Technology
An extra £1.6bn will be made available to support the vaccine rollout and ‘future preparedness’
Visa reforms will be made to make it easier for highly skilled migrants to come to the UK
Increased funding for the devolved administrations
An additional £1.2 billion will be provided to the Scottish Government, an extra £740 million will be provided to the Welsh Government and £410 million will go to the Northern Ireland Executive.
A number of city and growth deals in the devolved administrations will receive funding more quickly.
The Government’s full Budget document can be found on gov.uk