In perhaps one of the most anticipated Budgets of all time, on Wednesday 3rd March 2021, Chancellor Rishi Sunak announced in parliament his plans to help the country bounce back from the coronavirus pandemic. We’ve summarised the Budget 2021 in under 500 words – ideal for those who want the details in fewer words as possible!
Coronavirus
- Furlough is extended until the end of September.
- Self-employed support will also continue until the end of September.
- No additional support announced for PSC contractors.
- Universal Credit uplift (£20 per week) will be extended for six months.
- A one off £500 payment will be available for Working Tax Credit claimants.
- The National Minimum Wage (NMW) will rise to £8.91 per hour from April.
The UK economy
- Shrank by 10% in 2020 due to coronavirus.
- 4% annual growth predicted for 2021.
- Economy should return to how it was before Covid-19 by mid-2022 (expected growth of over 7% next year).
- Unemployment set to peak at 6.5%, rather than previous prediction of 11.9%.
- UK borrowed £355 billion this year – peacetime record.
- 2021-2022 borrowing will be £234 billion.
Tax
- £12,750 tax-free allowance to remain until 2026 (from April 2021).
- Threshold for higher-rate tax payers will stay at £50,270 from April 2021 to 2026.
- Corporation tax increases from 19% to 25% in April 2023. Smaller companies with lower profits will keep 19% rate.
- Stamp duty holiday will continue until end of June.
- No changes in inheritance tax, pension life time allowances and capital gains tax exemptions until 2025-2026.
- 5% house deposits for first-time buyers available from major lenders from April 2021.
NHS and wellbeing
- The government will boost vaccine rollout with £1.65 billion. And, £50 million to help boost testing.
- An investment of £19 million for domestic violence support.
- New funding available to victims of Thalidomide scandal (£40 million).
- Support for armed forces veterans with mental health requirements (£10 million).
Sports & arts
- £400 million to help venues such as museums to open.
- Packages for sports and grassroots football, totalling £325 million.
- Contribution of £1.2 million in response to delayed Euro 2022 (hosted in England).
Business
- Businesses will experience a tax break to “unlock” investment up to £20 billion.
- Investment costs can be deducted from tax. This will lower taxable profits by 130%.
- Firms will be encouraged to take on apprentices. A £3,000 incentive will be available (and £126 million for traineeships).
- Low VAT will remain for hospitality sector until September. Then, it’ll rise to 12.5% for six months, before returning to normal.
- Business rates holiday will stay in place until June. 75% discount thereafter.
- Restart grants for small businesses and shops in England that closed due to coronavirus – up to £5 billion.
- You’ll be able to make contactless payments up to £100 (later in year, date not specified).
- Grants for businesses reopening after pandemic – non-essential (£6,000 per premises). £18,000 for other businesses such as hospitality, leisure and gyms.
Booze, fuel and tobacco
- Alcohol duties frozen for second year in a row.
- No added alcohol tax (spirits, wine, cider and beer).
- Duty of fuel remains frozen (11 years on the trot).
- Tobacco duty to rise by additional 2% (on top of inflation).
We’ve managed to produce an even shorter Budget 2021 summary of the BBC’s summary! Check out their piece here.
