Budget 2021 winners and losers – how it affects your finances explained

RISHI Sunak unveiled his bumper £65billion budget today, outlining support measures and cash to get Brits through the Covid crisis.

In his second budget, the Chancellor announced a raft of support measures, including VAT help, furlough, stamp duty cuts and further help for homebuyers.

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But who has missed out and who has gained? We round up what you need to know – and how it will affect you.

Winners

Here are all the winners…

Self-employed

In a big boost for self-employed workers hit by the Covid crisis, Mr Sunak revealed details of a fourth and fifth self employment grant today.

It will be a welcome relief for 600,000 self-employed workers who have been shut out of government support.

They will now be able to 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.

A fourth grant will cover lost earnings through February, March and April, while a fifth grant will cover May until September this year.

Brits on furlough

Prime Minister Boris Johnson promised “not to pull the rug out” on economic support for Brits on furlough when he unveiled his roadmap out of lockdown last week.

Rishi Sunak stood by this pledge in today’s Budget, extending furlough until the end of September. 

It means that 80% of people’s wages will continue to be paid for months to come, helping firms get back on their feet.

But employers will have to chip in from July, when they will be expected to contribute 10% of the cost.

This will increase to 20% in August and September when the economy reopens.

Homebuyers

Those looking to climb or get onto the property ladder will be given a helping hand by the Government under a number of new schemes.

Homebuyers will be able to swerve forking out for stamp duty a little while longer.

Following growing calls from industry experts for a stamp duty holiday extension, Mr Sunak said the relief would be available until September.

It was due to end on March 31, and applies for homes worth up to £500,000.

And Brits struggling to scrape together enough savings to buy their own home were given some good news in today’s Budget.

The Chancellor confirmed the Government will back mortgages for buyers with a deposit of 5% on homes worth as much as £600,000.

The scheme will slash the minimum amount first-time buyers need to purchase their own home in half.

It will launch next month and will be available for new mortgages up to December 31 2022.

The high street

Industry experts have said the pandemic has been the “worst time ever for retail”, with household names like Debenhams and Topshop collapsing into administration during the crisis.

But the Chancellor unveiled a £5billion lifeline to struggling businesses in his Budget in a bid to save the struggling high street.

Non-essential retail businesses, which can open in mid-April, will be able to receive grants of up to £6,000 per premises.

Hospitality and leisure businesses, such as gyms, can get up to £18,000, as they will open later.

Drivers

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For the tenth year running, this year’s Budget saw Mr Sunak freeze fuel duty to “keep the cost of living low” for had-pressed drivers.

The hated levy has been frozen at 57.95p per litre after plans to hike it were abandoned amid fears it will punish drivers who are helping the country bounce back.

It marks a major victory for The Sun’s legendary Keep It Down campaign, and Brits on the move – who already pay the most at the pumps in Europe.

Universal Credit claimants

During the coronavirus crisis, Universal Credit claimants have been given a £20 a week. It has been described as a “lifeline” for Brits struggling to make ends meet due to the pandemic.

It was due to end in March, but Rishi announced it will be extended for a further six months and “well beyond” the end of the national lockdown in his Budget.

The extended boost is thought to help prevent thousands of families plunging further into debt.

Working tax claimants

While Universal Claimants will keep the £20 a week boost, Brits on working tax credits will get a £500 one off payment to help them through the Covid crisis.

Mr Sunak said that because of the way that the Working Tax Credits system works, people will not be able to get the extra weekly £20.

Instead, they will be given a lump sum upfront.

Footie fans

Football could be coming home, as the Treasury has pledged £2.8million to go towards a bid for Britain to host the World Cup in 2030.

There will also be £25million in new funding from the Treasury to help the grassroots game grow – enough to build 700 new pitches.

That will help towards the government’s plans to get Britain match fit for the future.

To keep the beautiful game going, Brits will also be able to apply for up to £1million to rescue their local footie from closure.

The Chancellor hopes the jumbo fund will stop a generation of sports grounds from closing for good in the Covid recession.

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Drinkers

Brits will also be able to apply for up to £250,000 to save their local boozer.

It will allow neighbourhoods to take over assets loved by the community – and to help save pubs from collapsing.

Treasury chiefs hope this Community Ownership Fund will help Covid-battered high streets bounce back after the pandemic.

Brits are also set for cheaper pints in the pub too.

Mr Sunak froze alcohol duty for the second year in a row in a bid to boost pub sales for struggling boozers.

He also announced he is extending a VAT cut for the hospitality industry.

The 5% reduced rate of VAT is to be extended for six months to September 30.

And the standard rate won’t be returned to until April next year, with an interim rate of 12.5% for another six months after September.

In total, the move will see VAT cut by almost £5bn.

Losers

Here are a list of those who have missed out in this year’s Budget…

Working Brits

In a blow to grafters, Rishi announced a freeze to income tax thresholds, meaning Brits can’t benefit from planned increased to the amount that can be earned tax-free.

The tax-free personal allowance – the amount you can earn before paying tax – will rise as planned from April 2021 but then stay at that rate until April 2026.

For basic rate taxpayers the threshold will be held at £12,570 and £50,270 for higher rate tax payers.

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.

But the silver lining is that the National Living Wage is set to rise by £345 a year from April.

The National Living Wage is currently £8.72 an hour and will rise by 19p to £8.91 – an increase of 2.2% – from April.

This is the equivalent of £345 extra per year for someone working full-time.

Pension savers

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Pension savers were hit in this year’s budget.

The Chancellor announced a freeze on the pensions lifetime allowance until April 2026.

The allowance, which is the maximum amount you can save into your pension without having to pay extra tax, is £1,073,100.

Over a million in savings might seem like a huge amount, but over a retirement lasting 30 years or longer, it could pay less than the average UK salary.

Excluded self-employed workers

While 600,000 self-employed workers will benefit from Rishi’s fourth and fifth self employment grant scheme, others won’t.

Only self employed workers who filed a tax return last night will be able to apply for the final two grants.

Big businesses

Big businesses received a sting in today’s Budget as Rishi announced a hike in corporation tax to 25%.

The Chancellor said the rate will be raised from 19% from April 2023 as he looks to plug the huge black hole in the country’s pandemic-ravaged finances.

It will mark a screeching reversal of the UK’s decade-long drive to cut corporation tax, which was slashed from 28% in 2010 by then-Conservative chancellor George Osborne.

Public sector workers

Mr Sunak stayed silent on pay for public sector workers – many of which have been on the Covid front-line.

Many workers face a pay freeze this year, despite battling against the pandemic.

Union leaders slammed the Chancellor and said the Budget was an “insult” for leaving information on pay out.

Rehana Azam, national officer of the GMB, said: “The Chancellor can dance around his living room with the ministerial red box all he wants, but all this budget shows to public sector workers is that his clapping is a worthless gesture.

“When it comes down to it, the big ‘love-in’ and ‘immense praise’ has amounted to nothing for the workers that carried us through the pandemic.

For a deep dive into the how SEISS works, we’ve put together a guide with everything you need to known about the system.

We meet the entrepreneurs who’ve set up their own businesses after coronavirus left them jobless.

The Chancellor will take questions from the press and the public in a press briefing this evening at 5pm.

This post first appeared on thesun.co.uk