Chancellor Rishi Sunak has unveiled the contents of his Budget in the House of Commons.
Setting out the government’s tax and spending plans for the year ahead, he announced new measures to help business and jobs through the pandemic and to support the UK’s long-term economic recovery and a series of tax-raising plans to help rebalance the public finances.
Here is a summary of the main points.
Coronavirus Support
- Furlough to be extended until the end of September, with employers being asked to contribute 10% in July and 20% in August and September. The employee will continue to receive 80%.
- Support for the self-employed also to be extended until September
- 600,000 more self-employed people will be eligible for help as access to grants is widened
- £20 weekly uplift in Universal Credit worth £1,000 a year to be extended for another six months
- Working Tax Credit claimants will get £500 one-off payment
Taxation
- Minimum wage to increase to £8.91 an hour from April
- No changes to rates of income tax, national insurance or VAT
- Tax-free personal allowance to be frozen at £12,570 from April 2021 levels to 2026
- Higher rate income tax threshold to be frozen at £50,270 from April 2021 levels to 2026
- Corporation tax on company profits above £250,000 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
- Stamp duty holiday on house purchases in England and Northern Ireland extended to 30 June
- Inheritance tax thresholds, pensions life time allowances and annual capital gains tax exemptions to be frozen at 2020-2021 levels until 2025-26
Business, digital and science
- Tax breaks for firms to “unlock” £20bn worth of business investment
- Firms will be able “deduct” investment costs from tax bills, reducing taxable profits by 130%
- Incentives for firms to take on apprentices to rise to £3,000 and £126m for traineeships
- Lower VAT rate for hospitality firms to be maintained at 5% rate until September
- Interim 12.5% rate will then apply for the following six months
- Business rates holiday for firms in England to continue until June with 75% discount after that
- £5bn in Restart grants for shops and other businesses in England forced to close
- £6,000 per premises for non-essential outlets due to re-open in April and £18,000 for gyms, personal care providers and other hospitality and leisure businesses
Alcohol, tobacco and fuel
- All alcohol duties to be frozen for second year running
- No extra tax on spirits, wine, cider or beer
- Fuel duty to be frozen for eleventh consecutive year
- Tobacco duties to rise by inflation plus 2%
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