The Budget and What You Need to Know
Posted on 3rd March 2021 at 13:30
Did today’s Budget contain a bit too much information to digest in one go? We’ve rounded up all of the key points below.
The UK economy is forecast to return to pre-Covid levels by the middle of 2022.
Annual growth is set to rebound by 4% this year, followed by a 7.3% growth in 2022.
Unemployment is expected to peak at 6.5% next year, which is much lower than the 11.9% previously predicted.
The new UK Infrastructure Bank, based in Leeds, will be set up with an initial capitalisation of £12bn.
A new set of UK schemes called Help to Grow will include projects to support people in receiving management training, as well as oversee the training of small business in digital skills.
£1.6bn is being invested to support the vaccine roll-out programme.
New freeports will make it easier and cheaper to do business. The eight regions selected to be freeports are the Humber, East Midlands Airport, Felixstowe and Harwich, Liverpool City Region, Plymouth, Solent, Thames, and Teesside.
The basic personal allowance threshold will rise to £12,570 next year.
For higher-rate payers, the threshold will be £50,270.
Both rates will be frozen until 2026.
Corporation tax on company profits will increase to 25% in April 2023 for companies with profits over £250,000.
The new Small Profits Rate means that businesses with profits of £50,000 or less will still only pay 19% corporation tax.
The furlough scheme is being extended until the end of September 2021.
There’s no change to the terms for employees, as they will continue to receive 80% of their salary for hours not worked.
As businesses reopen, they’ll be asked to make a 10% contribution to furlough after July and 20% in August and September.
Business rates holiday
The business rates holiday will be extended through to the end of June.
The reduced VAT rate of 5% will be extended for six months to 30th September, followed by an interim rate of 12.5% for a further six months.
The standard rate will not return until April 2022.
The VAT registration threshold will remain at £85,000 until 2024.
Support for the self-employed
The SEISS grant will continue until September, with the fourth grant covering February to April and an additional fifth grant from May onwards.
Access to SEISS has been improved. Now that the tax return deadline has passed, providing that a self-employed person has already submitted a self-assessment tax return, they can now apply for the SEISS grant.
Retail, hospitality and leisure
A new Restart Grant will launch in April to help businesses reopen and get going again.
Non-essential retail businesses will receive grants of up to £6,000 per premises.
Hospitality and leisure businesses will get grants of up to £18,000 per premises.
A new £150m fund will allow communities to take ownership of pubs, theatres, shops and sports clubs that are at risk of closure.
The planned increase on alcohol duties has been cancelled.
Sport and Culture
Sporting, cultural and arts organisations will receive £700m to help them reopen.
The government promises to back the joint UK and Ireland bid to host the 2030 World Cup.
The planned increase on fuel duty has also been cancelled.
The existing £20 a week uplift to Universal Credit will continue for another six months until September 2021.
National Living Wage
The National Living Wage will rise to £8.91 from April 2021.
The incentive given to businesses for taking on new apprentices has doubled to £3,000. This applies to all new apprentice hires of any age, not just those aged 25 and over.
The stamp duty holiday for house buyers has been extended by an additional three months, running until the end of June 2021. Purchases up to £500,000 will continue to be free from tax.
Homes bought up to a value of £250,000 will be free from tax until the end of September 2021.
First-time buyers can access a government guarantee on mortgages, seeing a return of 5% deposits.
A further £19m will be invested into the Domestic Violence Programme to reduce the risk of reoffending and providing support for vulnerable women.
An additional £10m will be made available to veterans with mental health needs.
There will be a lifetime commitment to victims of the thalidomide scandal, starting with a £40m down payment.
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