RISHI Sunak has set out his Budget 2021 plan to help struggling families and keep British businesses afloat.
The Chancellor revealed extra help for 600,000 self employed people with grants of up to £7,500 and said furlough is to be extended until September.
He also revealed that hundreds of thousands of self-employed Brits, many of whom became self-employed in 2019-20, can now claim direct cash grants under the Self-Employment Income Support Scheme.
Previously they could only claim if they had filled in a recent tax return, which meant millions were shut out.
Rishi said the Government will give a fourth grant of up to £7,500 to the self-employed and a fifth one will come over the summer – in line with the furlough extension.
The Chancellor also extended the stamp duty holiday until June 30 as house prices rocketed 6.9 per cent year-on-year last month to a record high of £231,061 last month, new data shows.
A £20 a week Universal Credit uplift in payments has also been extended for another six months for low income households.
You can watch the Budget here, live on this page, by clicking the video above and follow all the latest news, updates and analysis of what the Budget means for you on our live blog below…
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FUEL DUTY FROZEN FOR 11TH YEAR RUNNING
Chancellor Rishi Sunak has announced that fuel duty will remain frozen for the 11th consecutive year.
Mr Sunak revealed in his Budget that the rate will remain at 58p per litre for petrol and diesel.
He told the Commons: “Right now, to keep the cost of living low, I’m not prepared to increase the cost of a tank of fuel.
“So the planned increase in fuel duty is also cancelled.”
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EXPLAINER – WHAT IS THE PERSONAL ALLOWANCE?
The personal allowance is an amount you can earn each year tax-free. In the current tax year running from 6 April 2020 to 5 April 2021, that amount is £12,500. You then pay between 20%-45% income tax depending on how much you earn.
- Low earners: If you earn £12,500 or less, you pay no income tax
- Basic rate: If you earn £12,501 to £50,000, you pay 20% tax
- Higher rate: If you earn £50,001 to £150,000, you pay 40% tax
- Additional rate: If you earn £150,000 or more, you pay 45% tax
Just keep in mind your personal allowance might be different if you’re entitled to certain allowances or earn a lot of money. The marriage allowance is a tax break where one partner in a married couple can transfer some of their unused personal allowance to another.
And people with sight issues can get the blind person’s allowance which increases this tax-free amount. And anyone who earns over £125,000 doesn’t get any tax-free personal allowance – they will pay income tax on everything they earn.
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STEALTH TAX
Millions of hard-working Brits will be hit by a stealth tax rise from today’s Budget.
The Chancellor Rishi Sunak announced a freeze to income tax thresholds, meaning Brits will no longer benefit from planned increases to the amount that can be earned tax-free.
In his Budget today, Mr Sunak said the tax-free personal allowance – the amount you can earn before paying tax – will remain at £12,500.
For higher rate tax payers, the personal allowance will be held at £50,000.
Although Mr Sunak stopped short of increasing taxes, a freeze to these thresholds is essentially a pay cut, once you take into account the rate of inflation.
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NO TIME FOR VICTORY LAP SAYS SIR KEIR
Sir Keir said: “The Chancellor may think that this is time for a victory lap but I’m afraid this Budget won’t feel so good for the millions of key workers who are having their pay frozen, for the businesses swamped by debt, and the families paying more in council tax.
“And the millions of people who are out of work or worried about losing their job and although the Chancellor spoke for almost an hour we heard nothing about a long term plan to fix social care.
“The Chancellor may have forgotten about it, but the Labour Party never will.”
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CORPORATION TAX WILL INCREASE TO 25% FROM 2023
Corporation tax will rise in the UK to levels not seen since 2011, Chancellor Rishi Sunak has announced.
He said the tax rate on profits made by businesses will increase from 19% to 25%, but will not be implemented until 2023.
Mr Sunak said: “The Government is providing businesses with over £100 billion of support to get through this pandemic, so it is fair and necessary to ask them to contribute to our recovery.
“Even after this change the UK will still have the lowest corporation tax rate in the G7 – lower than the United States, Canada, Italy, Japan, Germany and France.”
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ASDA TO NOT ACCEPT THE OFFER OF RATES RELIEF ANNOUNCED BY CHANCELLOR
Supermarket Asda has said it will continue to pay its business rates bill in full during 2021-22 and will not accept the offer of rates relief announced today by the Chancellor in his spring Budget.
Roger Burnley, Asda chief executive and president, said: “We have always sought to support colleagues, customers and communities during the pandemic and will continue to do so as long as Covid remains a threat.
“There are clearly many industries and businesses that have been hard hit by the pandemic and we hope that by continuing to pay business rates in full this year we can continue to support the nation’s economic recovery from the pandemic.”
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OBR: ECONOMY WILL BOUNCE BACK FASTER BUT BORROWING COULD TAKE DECADES TO REPAY
Britain’s vaccination efforts will help the economy recover faster than first feared but government borrowing will balloon to record peacetime levels this year and next, according to the fiscal watchdog.
The Office for Budget Responsibility (OBR) is now predicting the economy to recover to its pre-crisis level by the middle of next year – six months earlier than previously expected.
Unemployment caused by the pandemic will also be lower than expected, with the unemployment rate peaking at 6.5% down from 11.9% predicted last July.
This will mean 1.8 million fewer people expected to be out of work than previously thought.
The OBR hiked its outlook for gross domestic product (GDP) – a measure of the size of the economy – for 2022 to 7.3% from 6.6% previously thanks to a “swifter and more sustained recovery”.
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A LABOUR BUDGET WOULD HAVE FOCUSED ON NHS AND SOCIAL CARE SAYS STARMER
“A Labour budget would have had the NHS and social care front and centre, but the Chancellor was silent on this.”
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LABOUR’S KEIR STARMER IS NOW SPEAKING
Keir Starmer is now addressing the House of Commons.
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PICTURED
Rishi Sunak delivering his Budget statement to the House of Commons.
Credit: supplied by Pixel8000 -
SUNAK CONFIRMED DARLINGTON CAMPUS
Rishi Sunak confirmed the Treasury would establish a new economic campus in Darlington, and said there would be more than £1 billion for 45 new towns deals.
He also said: “We’re creating a £150 million fund to help communities across the UK take ownership of pubs, theatres, shops, or local sports clubs at risk of loss – putting more power in the hands of local people.”
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RISHI SUNAK HAS FINISHED GIVING HIS STATEMENT
The Chancellor has finished his statment for the Budget 2021.
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WHAT IS A FREEPORT?
According to the Chancellor freeports are ” special economic zones with different rules to make it easier and cheaper to do business.
“They’re well-established internationally, but we’re taking a unique approach. Our Freeports will have: Simpler planning – to allow businesses to build; Infrastructure funding – to improve transport links; Cheaper customs – with favourable tariffs, VAT or duties; And lower taxes – with tax breaks to encourage construction, private investment and job creation.”
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8 NEW FREEPORTS LOCATIONS IN ENGLAND
Eight new freeports locations in England: East Midlands Airport. Felixstowe and Harwich. Humber. Liverpool City Region. Plymouth. Solent. Thames. And Teesside.
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£1BILLION ANNOUNCEMENT FOR 45 NEW TOWN DEALS
“From Castleford to Clay Cross; Rochdale to Rowley Regis; and Whitby to Wolverhampton. And let me pay tribute to local leaders like the brilliant Mayor for the West Midlands, Andy Street, who are making the case for investment in their area,” Mr Sunak said.
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VISA REFORMS
There will be visa reforms aimed at skilled workers and migrants including a new unsponsored points-based to attract “the best and most promising international talent in science, research and tech”.
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BOOST IN BUDGET
Mr Sunak announced there is a £1.6billion to continue the vaccine rollout in becoming the “scientific superpower”.
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NEW UK WIDE SCHEME – HELP TO GROW
It will offer management training to tens of thousands of small and medium sized businesses and the Government will pay 90% of the cost.
There will be help to provide businesses with free expert training on how to develop their digitial skills with a 50% discount on new productivity-enhancing software – worth up to £5,000 each.
Both schemes will begin in Autumn.
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NEW SAVINGS FOR GREEN PRODUCTS
Rishi Sunak has announced a retail savings product which will give UK savers a chance to support green projects.
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UK INFRASTRUCTURE BANK ANNOUNCEMENT
A UK Infrastructure Bank will be built in Leeds and will invest across the Uk in public and private projects to finance the green industrial revolution.
It will begin in Spring with an initial capitalisation of £12billion.
It will be expected to support at least £40billion of total investment infrastructure.
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FUEL DUTY ALSO CANCELLED
An increase in fuel duty has also been cancelled.
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ALCHOLIC DUTIES FROZEN
Alcoholic duties will be frozen for the second year in a row, the third time in two decades.
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‘SUPER DEDUCTION’ ANNOUCNED
For the next two years, when companies invest, they can reduce their tax bill by reducing it by 130% of the cost.
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SMALL PROFITS RATE CREATED
Mr Sunak announced a protection of small businesses with profits of £50,000 or less by creating a Small Profits Rate maintained at the current rate of 19%.
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CORPORATIONTAX INCREASE
Corporation tax paid by companies will increase in 2023 to 25%.
