Tom Swarbrick 10pm - 1am
Budget 2021: Key points at a glance
3 March 2021, 14:30 | Updated: 3 March 2021, 16:40
Chancellor Rishi Sunak has announced his Spring Budget, ranging from extending the furlough scheme to increasing corporation tax.
He introduced a raft of measures to help people and businesses as the Covid pandemic continues to affect the UK economy.
The Chancellor said coronavirus has caused one of the "largest, most comprehensive and sustained economic shocks this country has ever faced".
But what were the key points which the Chancellor announced?
- The furlough scheme will be extended to the end of September, as will support for the self-employed.
- The Universal Credit uplift of £20 a week will continue for a further six months, well beyond the end of this national lockdown.
- The Chancellor confirmed an additional £1.6 billion for the coronavirus vaccine rollout and to "improve future preparedness".
- A new restart grant will start in April to help businesses reopen, with £5 billion of funding.
- The Government will not raise the rates of income tax, national insurance, or VAT, instead freezing personal tax thresholds.
- Inheritance tax thresholds, the pensions lifetime allowance, and the annual exempt amount in capital gains tax will be maintained at current levels until April 2026.
- The Chancellor said: "We will of course deliver our promise to increase it again next year to £12,570, but we will then keep it at this more generous level until April 2026. The higher rate threshold will similarly be increased next year, to £50,270, and will then also remain at that level for the same period."
Rise in corporation tax
- Corporation tax will rise in the UK to levels not seen since 2011, Mr Sunak announced.
- The tax rate on profits made by businesses will increase from 19% to 25%, but will not be implemented until 2023.
- The rise puts the UK above the EU average of 21.7% but remains below the US corporation tax level of 27%, which President Joe Biden has said he is looking to increase.
- France's rate is 26.5%, Germany has a rate at 30%, Canada at 26.5%, Japan at 30.62% and Italy at 24%, according to data from KPMG.
- Mr Sunak reverses a decade of cuts to the tax, leading to the current level of 19% since 2017. Former chancellor George Osborne had previously said he wanted the tax to go as low as 15%.
- Corporation tax receipts in 2018-19 were £55.1 billion, and £63.2 billion in 2019-20.
Business rates holiday extended and VAT cut extended
- The Chancellor said that the business rates holiday will be extended until the end of June for hard-hit retail, hospitality and leisure firms before shifting to a two-thirds discount for the rest of the year.
- Mr Sunak also told MPs that current VAT cuts for hospitality firms will also be extended for another six months, before tapering back to the previous tax rate.
- He also told MPs that the current temporary 5% rate of VAT on food and soft drinks, hotel accommodation and leisure attractions will be extended until September 30.
New Recovery Loan Scheme for businesses
- The Government will back loans of up to £10 million for companies that need support until the end of the year as its Covid-19 lending schemes run out.
- Chancellor Rishi Sunak told MPs he plans a new Recovery Loan Scheme to tie businesses over.
- It replaces the Bounce Back Loan Scheme (BBLS), the Coronavirus Business Interruption Loan Scheme (CBILS) and its larger sibling CLBILS.
- The Treasury will promise banks to cover 80% of what they lend if businesses do not pay back their loans.
- The new scheme has the same Government guarantee as CBILS and CLBILS, but is less generous than the 100% guarantee for BBLS.
Freezing fuel duty
- Mr Sunak announced that fuel duty will stay frozen for the 11th consecutive year, remaining at 58p per litre for petrol and diesel.
- Fuel duty has been frozen since March 2011.
'Mortgage guarantee' for buyers with 5% deposit
- The Chancellor announced a new "mortgage guarantee" for buyers with a 5 per cent deposit, telling MPs he wants to turn "generation rent into generation buy."
- The new scheme will see lenders benefitting from a Government guarantee on lending to people with a five per cent deposit.
- It will be available to current homeowners as well as first-time buyers looking to buy a house for up to £600,000.
- Lloyds, NatWest, Santander, Barclays and HSBC are among those who will be offering the 95 per cent mortgages from next month, with others including Virgin Money following soon after.
Extending stamp duty holiday
- The Chancellor confirmed an extension to the stamp duty holiday, with the £500,000 nil rate band extended from March 31 to June 30.
- The band will then fall to £250,000, double its standard level, until the end of September, before returning to the usual level of £125,000 from October 1.
- The minimum wage will increase to £8.91 an hour from April.
- On apprenticeships, the Government is to double the incentive payments given to businesses to £3,000 for all new hires, of any age.
- All alcohol duties are frozen for the second year in a row.
- Freeports - "special economic zones with different rules to make it easier and cheaper to do business" - will be located at East Midlands Airport, Felixstowe and Harwich, the Humber region, the Liverpool City Region, Plymouth, Solent, Thames and Teesside.
- There was more funding for the devolved administrations, with £1.2 billion for the Scottish Government, £740 million for the Welsh Government, and £410 million for the Northern Ireland Executive.
- An extra £19 million will be handed to domestic violence programmes.
- Survivors of the Thalidomide scandal will be given a "lifetime commitment" with an extra down payment of £40 million.