Chancellor Rishi Sunak has set out an extra £65bn in COVID support for employees and businesses – but announced a freeze on income tax thresholds and a rise in corporation tax to help pay back the UK’s rising debts.
In his budget speech, Mr Sunak set out a three-part plan to “protect jobs and livelihoods of the British people”.
Here are the key points from the Budget:
The furlough scheme, which had been due to expire at the end of April, will be extended until the end of September – meaning wages for millions temporarily laid off due to the coronavirus continuing to be subsidised.
After July, businesses will be asked for a 10% contribution, rising to 20% in August and September.
Another 600,000 people will also be eligible for grants, including many of the self-employed who previously missed out.
There will also be £520m to help businesses boost their software and training.
A new Restart Grant in April, will be given to businesses of non-essential business will be able to get £6000 per premises in April and up to £18,000 for firms that open up later.
5% vat for hospital businesses will be extended for 6 months, and then will then follow with an increase to 12.5% for another 6 months until next April 2022.
Sunak confirms alcohol duties will be frozen for another year.
Businesses coronavirus Loans will be replaced and a new Recovery Loan Scheme available until the end of the year with a government guarantee of 80%. Business any size can apply for £25,000 up to £10m.
The £20-a-week temporary increase in universal credit will be extended for a further six months.
There will also be a one-off payment of £500 to working tax credit claimants.
A mortgage guarantee scheme will help home buyers purchase properties for people that can only afford a deposit of just 5% with the government underwriting the other 95%.
The stamp duty holiday announced last summer on homes worth up to £500,000, has been extended to June. After this date, the starting rate of stamp duty will be £250,000 until the end of September.
No changes will be made to Income Tax, National Increase or VAT. The personal threshold will be frozen until next year; Personal income tax allowance to be frozen at £12,570 from 2022 to 2026 and a Higher rate income tax threshold to be frozen at £50,270 from 2022 to 2026
From April 2023, corporation tax will increase to 25%. Small business relief will mean any business that makes £50,000 or less will not see a change to the current 19%. Companies making profits of £250,000 or more will be taxed at the highest rate of 25%.
The VAT registration threshold will remain at £85,000 until 2024.
A fast track visa will be available to ‘top talents’ targeting high-skilled workers in researchers, engineers, scientist and the tech sector.