Budget 2021 – brief summary of the key points

We will bring you more detailed information over the coming days but here is a summary of the Budget’s key points:

Coronavirus support

The Furlough scheme to be extended until the end of September
Government will continue paying 80% of employees’ wages for hours they cannot work
Employers to be asked to contribute 10% in July and this will increase to 20% in August and September
Support for the self-employed also to be extended until September
The 4th SEISS grant will cover February to April, worth 80% of average trading profits up to £7,500.
A 5th SEISS grant will be available from July.
600,000 more self-employed people will be eligible for help as access to grants is widened
Universal Credit top-up of £20-per-week will continue for a further six months
Working Tax Credit claimants will get £500 one-off payment
Minimum wage to increase to £8.91 an hour from April

UK economy shrank by 10% in 2020
Economy forecast to rebound in 2021, with projected annual growth of 4% this year
Economy forecast to return to pre-Covid levels by middle of 2022, with growth of 7.3% next year
700,000 people have lost their jobs since pandemic began
Unemployment expected to peak at 6.5% next year, lower than 11.9% previously predicted
UK to borrow a peacetime record of £355bn this year.
Borrowing to total £234bn in 2021-22

No changes to rates of income tax, national insurance or VAT
Personal income tax allowance to be frozen at £12,570 from 2022 to 2026
Higher rate income tax threshold to be frozen at £50,270 from 2022 to 2026
Corporation tax on company profits to rise from 19% to 25% in April 2023
Rate to be kept at 19% for about 1.5 million smaller companies with profits of less than £50,000
The stamp duty holiday on properties worth up to £500,000 will be extended from the end of March until the end of June and after that there will still be no duty on homes worth up to £250,000 for another three months. The threshold will return to the usual level of £125,000 from October
No changes to inheritance tax or lifetime pension allowance or capital gains tax allowances

£1.65bn to support the UK’s vaccination rollout
£19m for domestic violence programmes, funding network of respite rooms for homeless women
£40m of new funding for victims of 1960s Thalidomide scandal and lifetime support guarantee

There is £400m to help arts venues in England re-open which includes museums and galleries
£300m for professional sport
£25m for grassroots football

Tax breaks for firms to “unlock” £20bn worth of business investment
Firms will be able “deduct” investment costs from tax bills, reducing costs by 130%
Incentive grants for apprenticeships to rise to £3,000 and £126m for traineeships
Reduced rate of 5% VAT for the hospitality and tourism sectors has been extended to the end of September, and will increase to 12.5% after that, before returning to 20% next April
The 100% business rates holiday in England will continue from April until June with 75% discount after that
£5bn of new grants for hard-hit firms – worth up to £6,000 for non-essential retailers and £18,000 for restaurants, pubs, personal care and gym businesses which will reopen later
New visa scheme to help start-ups and rapidly growing tech firms source talent from overseas
Contactless payment limit will rise to £100 later this year

£1.2bn in funding for the Scottish government, £740m for the Welsh government and £410m for the Northern Ireland executive
750 civil servants to be relocated to new Treasury campus in Darlington
£1bn Towns Fund fund to promote regeneration in 45 English towns
£150m for community groups to take over pubs at risk of closure
First eight sites for freeports in England announced

The government will guarantee 95% mortgages to help those who can only afford a 5% deposit to help people get on the housing ladder
New UK Infrastructure Bank will be set up, in Leeds, with an initial capitalisation of £12bn – to finance public and private sector “green industrial revolution” projects

If you have any questions about the 2021 Budget, please do not hesitate to contact us.

Our friendly team are ready to help you and answer any questions you may have. Just use the form below and get in touch.