Today, the Chancellor has announced a Budget that protects the jobs and livelihoods of the British people. One year ago, the Government promised the British people that it would do whatever it takes to provide security and stability. They are delivering on that promise, providing £407 billion of support for families, jobs and businesses – which is more than almost any other country in the world.
This Budget protects the jobs and livelihoods of the British people in three parts: supporting people and businesses through this moment of crisis, beginning to fix the public finances with a fair and honest plan about how to do so, as well as building our future economy.
As part of this package, the following announcements have been made:
- Furlough has been extended until the end of September. Employees will continue to receive 90% of wages for hours not worked. As businesses reopen, they will be asked to contribute 10% of wages in July, and 20% in August and September.
- Two further grants for the self-employed. This includes a fourth grant covering the period of February to April, worth 80% of people’s average monthly revenues. From May, a fifth grant will be available which is more targeted to those most affected by the pandemic. Those whose turnover has fallen by more than 30% will receive the 80% grant, while those whose turnover has fallen by less than 30% will receive a 30% grant. More than 600,000 people, including many who became self-employed last year and filed their 19/20 tax return by 2 March will now be eligible for these grants.
- Restart grants to help businesses get going again. Non-essential retail business will open first and therefore receive grants of up to £6,000, while hospitality and leisure businesses (including personal care, hairdressers and gyms) will likely open later or with more restrictions so receive grants of up to £18,000.
- Business rates holiday continued until June, before cutting rates by two-thirds for the remaining nine months of the financial year.
- VAT cut to 5% extended for a further six months until the end of September. The rate will then increase to 12.5% from October until the end of March, before returning to the normal 20% rate from 1 April 2022.
- Stamp Duty Cut extended to the end of June, before tapering down to £250,000 until the end of September. It will then return to the normal level of £125,000 from 1 October.
- A new mortgage guarantee scheme for homebuyers. From April, lenders who commit to provide loan-to-value rations of between 91 to 95 per cent can get a government guarantee on the full value of these mortgages.
- New recovery loans to replace our existing loan schemes. As existing loan schemes come to an end, new recovery loans will take their place with loans from £25,000 up to £10 million, with an 80% Government guarantee.
- The temporary £20 uplift to Universal Credit will continue for a further six months. Due to the way the system works operationally, those on Working Tax Credits will receive their equivalent of six months of support through a one-off payment of £500.
- As part of the UK Government’s Plan for Jobs to support, protect and create jobs, the Chancellor is increasing support with £126 million of new money to enable 40,000 more traineeships, and doubling the cash incentive to firms who take on an apprentice to a £3,000 payment per hire.
- National Living Wage is increasing to £8.91 from April and it is being extended to people over 23.
- Income tax personal allowance and the higher rate threshold will rise next year as planned and will then be maintained at that level until April 2026. Nobody’s take home pay will be less than it is now, and the UK’s allowances remain the most generous of any G20 country.
- Alcohol and fuel duty will be frozen.
- We are providing £700 million to support local and national arts, culture and sports institutions as they reopen. We’re also piloting a new apprenticeship scheme for creative industries, and extending our successful £500 million Film and TV Production Insurance Restart Scheme.
The measures mentioned above are excellent news for businesses, employees, and families - providing certainty and security. The Government has confirmed that it will continue to support families and businesses as we come out of the pandemic and begin to recover our economy.
The wider Budget continues to provide unprecedented support through the current crisis, while sets out a path for fixing the public finances and ensures a route to build our future economy.
You can see the full announcements on Gov.uk here: https://www.gov.uk/government/topical-events/budget-2021.