Everything Rishi Sunak Announced In The Budget Including Furlough, Universal Credit, Corporation Tax Rise and Freeports
Rishi Sunak outlined a raft of spending along with a planned hike in corporation tax in today's Budget (Alamy)
Rishi Sunak has set out his three-point plan for helping the economy recover from the impact of the Covid-19 pandemic with a raft of spending commitments, an increase to corporation tax and moving the Treasury to Darlington.
Here is everything outlined by the Chancellor in his Budget today:
The Coronavirus Job Retention Scheme will be extended until the end of September, allowing businesses to continue to furlough employees with their wages paid by the government.
As part of the extension there will be no change to the current terms for employees, and they will continue to receive 80% of their salary for hours not worked until the scheme ends.
But after the end of June, businesses will be asked to contribute alongside the taxpayer, to the tune of 10% in July and 20% in August and September towards the hours their staff do not work.
Sunak announced a fourth and a fifth grant under the Self-Employment Income Support Scheme, and an extension to how many people are eligible.
People who are self-employed can claim cash worth 80% of three months’ average trading profits, up to £7,500 in total.
It was initially based on tax returns for 2018-2019, meaning it wasn’t possible for the newly self-employed to qualify, but now the data for 2019-2020 is available, hundreds of thousands more people will be eligible.
The reduced 5% rate of VAT for the tourism and hospitality sector is being extended to the end of September, and there will be an interim rate of 12.5% for another six months after that.
Sunak confirmed the £20 per week uplift to Universal Credit announced last year would be kept in place for another six months after lobbying from Labour MPs and some Conservative backbenchers.
Those who are on Working Tax Credits will get equivalent support to the uplift, so rather than a weekly increase they will get a one-off payment of £500.
Sunak also said the minimum wage will increase to £8.91 an hour from April.
Sunak revealed personal tax thresholds will be frozen until April 2026, meaning the level at which people start paying any income tax will increase to £12,570, but then be held there for four years.
The higher rate threshold will similarly be increased next year to £50,270, and then remain at that level for the same period in a move which will be seen as a stealth increase
Inheritance tax thresholds, the pensions lifetime allowance, and the annual exempt amount in capital gains tax will also be maintained at current levels until April 2026
The tax paid on company profits will increase from 19% to 25% from 2023, but businesses with profits of £50,000 or less would be protected by the introduction of a Small Profits Rate, which would maintain corporation tax at 19%.
And overall the increase in corporation tax would be tapered, meaning only those companies with profits above £250,000 would pay the full 25% rate.
There will also be a "super deduction" for companies when they invest, reducing their tax bill by 130% of the cost for the next two years
The government is creating a new Recovery Loan Scheme to replace previous coronavirus loan packages, allowing businesses of any size to apply for loans from £25,000 up to £10million through to the end of the year, and will provide lenders with an 80% guarantee.
The business rates holiday for the retail, hospitality and leisure sectors will be kept in place until the end of June, with a two-thirds discount for the remaining nine months of the financial year.
The long-awaited new Treasury campus in northern England will be situated in Darlington, conveniently close to the Chancellor's own Richmond constituency.
The site will initially employ 750 officials and is expected to take five years to set up, but no specific site for it has yet been identified.
The amount of money that can be spent using contactless card payments has been increased from £45 to £100 in a move meant to help retailers after they open up post-lockdown.
It is is the second increase during the pandemic, after the upper ceiling was moved from £30 to £45 last spring.
The site of eight Freeports was revealed: East Midlands Airport, Felixstowe and Harwich, the Humber region, the Liverpool City Region, Plymouth, Solent, Thames and Teesside.
Sunak said they will have "simpler planning", "cheaper customs – with favourable tariffs, VAT or duties", and lower taxes – with "tax breaks to encourage construction, private investment and job creation".
Restart Grant scheme
A £5billion high street fund to help retail, hospitality, accommodation, leisure and personal care sectors reopen post-lockdown.
Business will be able to get up to £18,000 each, and around 700,000 are expected to be eligible as soon as the fund goes live.
Help to Buy
The Help to Buy scheme will return, aiming to help first-time buyers to get on the property ladder with a deposit of just 5% of the purchase price.
The Treasury will guarantee a chunk of the loan offered by mortgage companies, and can be used on properties worth up to £600,000.
Alcohol, tobacco and fuel duty
The Chancellor froze all alcohol duties for the second year in a row, and scrapped a planned increase in fuel duty to keep it frozen for a 10th year in a row.
Stamp Duty holiday
People will not have to pay any stamp duty on properties up to £500,000 for a period extended to June 30.
After that homebuyers will not pay stamp duty for purchases below £250,000, double the standard amount, until the end of September.
It will return to the usual level of £125,000 minimum floor from 1 October.
A new flexi-apprenticeship programme will allow people to work for a number of different employers in the same sector.
From July, employers will be able to bid for money from a £7million fund to create new agencies, with the first “flexi-job” apprenticeships expected to start in January 2022.
Firms can also get up to double the current cash incentive to firms who take on an apprentice, and there is an extra £126million investment to enable 40,000 more traineeships.
A new fast-track visa route, without the need for sponsorship or third-party endorsement, for fintech firms will start in March 2022.
It will make it easier for them to recruit the employees from across the globe in an effort to grow the industry, create more jobs and help drive economic recovery.
Sunak announced a £1.65billion cash injection to boost the vaccine roll-out and ensure every adult is offered a dose by 31 July, as well as further £33million in vaccine testing and development to protect against future outbreaks and variants.
Alongside this another £22million will be earmarked for a world-leading study to test the effectiveness of combinations of different Covid-19 vaccines.
Buy your boozer
Pub-goers will be able to help protect their favourite locals with a £150million pot for community groups to take over struggling venues.
The Community Ownership Fund will give people up to £250,000 to buy into endangered sports clubs, theatres, music venues and post office buildings as well as pubs, with up to £1million in matched-funding available in exceptional cases to help establish a community-owned sports club or buy a sports ground at risk of loss from the community.
A sport close to the Chancellor’s heart will get a significant chunk of a £300million summer sports recovery package to ensure it gets through the transition out of lockdown into the summer.
Britain’s world-renowned arts, culture and heritage industries will get a funding boost of nearly £410million, thanks to an extra £300million pumped into the £1.57billion Culture Recovery Fund, £90miilion for National Museums and cultural bodies, and £18.8m for community cultural projects.
Reforms to the rules that govern how companies raise finance on public markets, as recommended by an independent review, chaired by Lord Hill, commissioned last November.
A new £100million taskforce to crack-down on Covid fraudsters who have exploited government support schemes.
The Taxpayer Protection Taskforce will be staffed by more than 1,250 HMRC operatives responsible for investigating and combatting those who have sought to fraudulently claim taxpayer’s money through schemes such as furlough and the Self Employment Income Support Scheme.
Sunak has pledged a new £19million fund to tackle domestic abuse, which he described as "one of the hidden tragedies of lockdown”, which will be used to pilot a network of 'Respite Rooms’ to provide specialist support for vulnerable homeless women.
Victims of the Thalidomide scandal will receive financial support for the rest of their lives as the Thalidomide Health Grant is being extended from its current end point of April 2023.
There will be a £39million down payment that will cover the next four years, and future funding beyond that to help more than 400 people in the United Kingdom through direct cash grants to help access personalised specialist care, rehabilitation and treatment.
The UK Infrastructure Bank, which will be located in Leeds, will be backed with an initial £12billion of capital and £10billion of government guarantees to offer equity, loans and guarantees to firms and potentially unlock £40 billion of infrastructure investment from the private sector on projects in sectors such as renewable energy, carbon capture and storage and transportation.
There is also the creation of the world’s first sovereign green savings bond for retail investors, offered by NS&A, which will allow them to put money towards accelerating the transition to a low carbon economy, in areas such as offshore wind, energy storage and green energy crops.
A set of UK-wide "Help to Grow" schemes will offer access to management training and to provide online training to firms.
City and growth deals
Sunak announced city and growth deals in Ayrshire, Argyll and Bute, and Falkirk, adding there will be three more in North Wales, Mid Wales, and Swansea Bay, and a further £1billion will be given for 45 new Town Deals.
There will be funding for the Holyhead hydrogen hub, the Global Centre of Rail Excellence in Neath Port Talbot, the Aberdeen Energy Transition Zone, and the Global Underwater Hub and the North Sea transition deal.
Through the Barnett formula the Budget increases funding for the devolved administrations by £1.2billion for the Scottish government, £740million for the Welsh government and £410million for the Northern Ireland executive."