Following the budget announcement today by the Chancellor, Rishi Sunak, we have outlined below the key changes:
 
Continued Coronavirus Support
  • Furlough to be extended until the end of September
  • Government to continue paying 80% of employees' wages for hours they cannot work
  • Employers to be asked to contribute 10% in July and 20% in August and September
  • Support for the self-employed also to be extended until September
  • 600,000 more self-employed people will be eligible for help as access to grants is widened
  • £20 uplift in Universal Credit worth £1,000 a year to be extended for another six months
  • Working Tax Credit claimants will get £500 one-off payment
  • Minimum wage to increase to £8.91 an hour from April
     
The Economy
  • UK economy shrank by 10% in 2020
  • Economy forecast to rebound in 2021, with projected annual growth of 4% this year
  • Economy forecast to return to pre-Covid levels by middle of 2022, with growth of 7.3% next year
  • UK to borrow a peacetime record of £355bn this year.
  • Borrowing to total £234bn in 2021-22
     
Tax
  • No changes to rates of income tax, national insurance or VAT
  • Personal income tax allowance to be frozen at £12,570 from 2022 to 2026
  • Higher rate income tax threshold to be frozen at £50,270 from 2022 to 2026
  • Corporation tax on company profits to rise from 19% to 25% in April 2023
  • Rate to be kept at 19% for about 1.5 million smaller companies with profits of less than £50,000
  • Stamp duty holiday extended to June, with no levy on sales of under £500,000
  • Stamp duty holiday then tapered to nil-rate band of £250,000 until the end of September - returning to usual level of £125,000 from 1 October
  • No changes to inheritance tax or capital gains tax allowances
  • Pension lifetime allowance frozen at £1,073,100 until 2026
  • Government to continue paying 80% of employees' wages for hours they cannot work
  • Employers to be asked to contribute 10% in July and 20% in August and September
 
Business
  • Tax breaks for firms to "unlock" £20bn worth of business investment
  • Firms will be able to "deduct" investment costs from tax bills, reducing costs by 130%
  • Incentive grants for apprenticeships to rise to £3,000 and £126m for traineeships
  • VAT rate for hospitality firms to be maintained at 5% until September
  • Interim 12.5% rate to apply for the following six months
  • Business rates holiday for firms in England to continue until June with 75% discount after that
  • £5bn in re-opening grants for non-essential businesses worth up to £6,000 per premises
  • New visa scheme to help start-ups and rapidly growing tech firms source talent from overseas
 
If you wish to discuss any aspects of the budget on your finances, or existing portfolios, please contact your Dentons Wealth adviser.

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