Budget 2021: What was announced in Rishi Sunak's budget?

Rishi Sunak today unveiled his Budget which set out a £65 billion spending package this year and next to support the economy as it recovers from the pandemic.

Wednesday, 3rd March 2021, 5:14 pm

The Chancellor said coronavirus has caused one of the “largest, most comprehensive and sustained economic shocks this country has ever faced”, and announced a range of measures.

Financial support

The furlough scheme was extended until the end of September, though employers will be expected to pay 10 per cent towards the hours their staff do not work in July, increasing to 20 per cent in August and September.

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Rishi Sunak today unveiled his Budget which set out a £65 billion spending package this year and next to support the economy as it recovers from the pandemic.

There was a six months extension to the Universal Credit uplift of £20 a week, but opposition parties say it still leaves claimants facing a cliff edge.

There was a boost for the tourism and hospitality sector, with the 5 per cent reduced rate of VAT extended til September, with an interim rate of 12.5 per cent for another six months after that.

He also continued the business rates holiday for the retail, hospitality and leisure sectors until July, with a two-thirds discount for the rest of the year. In Scotland, the rates relief is set to last the whole year.

Mr Sunak also extended the stamp duty holiday in England from the end of March until the end of June, with a new £250,000 threshold until the end of September. Similar measures in Scotland are currently due to end at the end of March.

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Budget 2021: Rishi Sunak raises tax on businesses to ‘repair economy’

Tax

Corporation tax will increase from 19 per cent to 25 per cent in 2023. But a new "small profits rate" will maintain the 19% rate for firms with profits of £50,000 or less - meaning around 70 per cent of companies - 1.4 million businesses - will be "completely unaffected" by the tax hike.

Mr Sunak said there would be a "super deduction" for companies when they invest, reducing their tax bill by 130 per cent of the cost for the next two years.

Rates of income tax, national insurance and VAT will be kept at the same level but personal tax thresholds will be frozen from April 2026.

This will hit take home pay over the next five years, although Mr Sunak insisted nobody's earnings will go down.

Inheritance tax threshold and the pensions lifetime allowance will go unchanged until April 2026.

Scotland

In a boost for all Scotch whisky and other beverages, planned increases on duty for alcohol were cancelled, with the duties frozen for the second year in a row.

Scotland will receive a £1.2 billion boost as a result of the UK Budget, with Mr Sunak insisting this was a Budget that "meets the moment".

The Welsh administration was handed £740 million, while £410 million was set aside for the Northern Ireland Executive.

There was also accelerated funding for "growth deals" in Ayrshire, Argyll and Bute, and Falkirk, as well as £27 million investment in the Aberdeen Energy Transition Zone.

A further £5m will be provided for Aberdeen’s Global Underwater Hub.

Other business

The minimum wage will increase to £8.91 an hour from April this year.

Incentive payments given to businesses for hiring new apprentices will double to £3,000 .

A “mortgage guarantee” was announced, with homebuyers who can only afford a 5 per cent deposit benefitting from a Government guarantee on those mortgages.

The UK Infrastructure Bank will be located in Leeds, while the Treasury is to establish a new economic campus in Darlington, near the Chancellor’s constituency.

Freeports will be located at East Midlands Airport, Felixstowe and Harwich, the Humber region, the Liverpool City Region, Plymouth, Solent, Thames and Teesside.

An extra £19 million will be handed to domestic violence programmes.

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