Extensions to the furlough and self-employed schemes, business rates relief and the 5% VAT cut have been announced in today’s Budget along with emergency loans, 'restart' grants and a 6% corporation tax increase.
The Chancellor Rishi Sunak delivered his Budget in Parliament this lunchtime, pledging to help the country through the later stages of the Covid pandemic and to begin the work of building our future economy.
The key points are:
- Extension of the furlough scheme until September with employers to pay 10% towards the hours their staff do not work in July, increasing to 20% in August and September.
- A fourth and a fifth grant for the self-employed, plus 600,000 newly self-employed who filled out a tax return by midnight last night can now claim the fourth and fifth grants.
- The National Living Wage will rise to £8.91 from April.
- Apprentice payments will double to £3,000 for businesses that take on new hires of any ages.
- A £5bn restart scheme with grants of up to £18,000 to help businesses hardest hit by the pandemic restrictions .
- A new recovery loan scheme where businesses of any size can apply for loans from £25,000 up to £10m with the government offering lenders a guarantee of 80%.
- Business rates holiday will be extended until the end of June with a two-thirds discount for the remainder of the tax year.
- The 5% reduced rate of VAT for hospitality and tourism will continue until September after which it will go to an interim rate for 12.5% until April next year.
- On income tax, the threshold for paying the basic rate will rise to £12,570 next year while for higher-rate payers the threshold will be £50,270. Both rates will stay the same until 2026.
- VAT registration threshold will remain at £85,000 until 2024.
- Corporation tax will increase to 25% in 2023 for businesses with profits of £250,000 or greater. For small businesses with profits of £50,000 or less, corporation tax will be maintained at the current rate of 19%.
- Planned increases in duties for spirits, wine, cider and beer will be cancelled, with all alcohol duties frozen for a second year in a row. Fuel duty will also be frozen.
Commenting on the Budget, Sunak said: ”These are significant decisions to have taken. Decisions no chancellor wants to make. I recognise they might not be popular. But they are honest.”