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.
The Chancellor has announced that the Northern Ireland Executive is to get £410m in funding. Scotland is to get £1.2bn and Wales is to get £740m.
Furlough has also been extended until the end of September with the UK Government continuing to pay 80% of employees’ wages for hours they cannot work. Employers will be asked to contribute 10% in July and 20% in August and September. Support for the self-employed has also been extended until September.
Tax breaks will be made available for firms to “unlock” £20bn worth of business investment while they will also be able to “deduct” investment costs from tax bills, reducing taxable profits by 130%.
The VAT rate for hospitality firms to be maintained at reduced 5% rate until September with an interim 12.5% rate to apply for the following six months.
There will be a business rates holiday for firms in England to continue until June with 75% discount after that and £5bn in Restart grants will be available for shops and other businesses forced to close.
£6,000 will be available 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.
There will be no changes to rates of income tax, national insurance or VAT and personal income tax allowance to be frozen at £12,570 from April 2022 to 2026. Higher rate income tax threshold to be frozen at £50,270 from 2022 to 2026. Corporation tax on company profits will rise from 19% to 25% in April 2023 while the rate will be kept at 19% for about 1.5 million smaller companies with profits of less than £50,000.
600,000 more self-employed people will be eligible for help as access to grants is widened.
It is estimated that 700,000 people have lost their jobs since pandemic began with unemployment expected to peak at 6.5% next year.