Coronavirus – The Budget March 2021

 In Coronavirus

Key Points from Rishi Sunak’s March 2021 Budget

Chancellor Rishi Sunak announced a combination of further measures to support the economy in response to Coronavirus 12.30pm (today) on 3rd March 2021.

Rishi Sunak’s Opening Remarks

  • The Chancellor says he would do “whatever it takes” during the pandemic, and that he has done and will continue to do so. He went on to say;
  • “There has been acute damage to the economy, shrinking by 10% – the largest fall in 300 years, and borrowing is highest it has been outside of wartime. It’s going to take this country, and the whole world, a long time to recover from this extraordinary situation”

Furlough

  • Sunak confirms the extension of the furlough scheme until the end of September 2021.
  • Employees will continue to receive 80% of their wages until the scheme ends, but firms will be asked to contribute 10% in July and 20% in August and September as the scheme is gradually phased out.

VAT Rate Cut Extension

  • 5% reduced rate of VAT will be extended until the end of September 2021. Then it will be gradually increased, at 12.5% for six months, before returning to the standard rate from April 2022.

Corporation Tax

  • Companies with profits of less than £50,000 will remain at 19%.
  • In April 2023, the rate of corporation tax for companies with profits over £50,000 will increase to 25%.
  • The rate will be tapered so that only businesses with profits of more than £250,000 will be taxed at the full 25% rate; that means only 10% of companies will pay the full higher rate.
  • The government is investing £25bn by allowing a 130% super-deduction on tax for investments made by companies. This means firms can cut their taxes by up to 25p for every pound they invest.

Other Taxes

  • The personal allowance will remain at £12,750 until 2026. The higher-rate threshold will increase to £50,270 next year, and also remain at that level.
  • The inheritance tax threshold, pensions lifetime allowance, annual exempt allowance from capital gains tax and VAT exemption threshold will also be frozen.
  • The government will not raise national insurance, income tax or VAT, but will freeze personal tax thresholds.

Self-Employed Income Support

  • Sunak also confirms the self-employment income support scheme has also been extended. The fourth grant will cover February to April, worth 80% of average trading profits up to £7,500.
  • A fifth and final grant will be available from May onwards, worth three months of average profits. This will be open to claims from late July.
  • 600,000 more self-employed people will be eligible for government help as access to grants is widened; Those who filed their tax return for 2019-20 by midnight last night are now eligible.
  • The £20-a-week uplift in universal credit is extended for six months.

Business Support Loans

  • As the government-backed bounce back loan (BBL) and coronavirus business interruption loan scheme (CBILS) come to an end, the Treasury is launching a new loan scheme to run until the end of the year. Loans can be between £25,000 and £10m.

Business Support Grants

  • Hospitality and leisure businesses pay no business rates for three months, then rates will be discounted for the remaining nine months of the year by two-thirds, in a £6bn tax cut.

Housing

  • As expected, stamp duty holiday on properties up to £500,000 continues until the end of June 2021. It will be kept at double its standard level until the end of September, and then return to usual levels from 1 October 2021.
  • The chancellor confirms a mortgage guarantee to help first-time buyers access 95% mortgages.

Duties

  • Alcohol duties will be frozen for the second year in a row.
  • Fuel duty will also be frozen

Source: The Guardian
https://www.theguardian.com/uk-news/2021/mar/03/budget-2021-key-points-rishi-sunak

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