The Chancellor, Rishi Sunak put forward the governments financial plans for the coming year
New measures to help business and jobs through the pandemic and to support the UK's long-term economic recovery were announced along with a series of tax-raising plans to help rebalance the public finances.
Here are just some of the points announced, focusing on those that relate to city businesses.
- The Job Retention Scheme will be extended until the end of September, with employees experiencing no change to the terms. Businesses will be asked to contribute alongside the tax payer, with a 10% contribution in July and 20% in August and September.
- Self-employed support will also continue until the end of September, with the highest grants being given to those whose profits have fallen by 30% or more.
- Access to self-employment support will be expanded as those that have filed a tax return before the deadline will now be able to qualify for the fourth and fifth grants.
- The £20 uplift to Universal Credit will be extended for a further six months.
- Working tax claimants will receive an equivalent amount of support for the next six months in the form of a one-off payment of £500.
- The National Living Wage will rise to £8.91 from April.
- A new incentive payment of £3,000 will be provided for businesses hiring apprentices at any age.
- £126m will be provided to triple the number of traineeships.
- A restart grant will open in April to allow businesses to get going again as lockdown eases.
- As non-essential retail businesses will be the first to open, they will be able to receive grants of up to £6,000 per premise.
- Hospitality, leisure and personal care businesses will receive grants of up to £18,000.
- The Business Bounce Back Scheme and Coronavirus Business Interruption Loan Schemes will come to an end but will be replaced with a new recovery loan scheme. This will allow businesses of any size to apply for loans between £25,000 and £10m through to the end of the year.
- The business rates holiday will be extended until the end of June. For the remaining months, there will be a two thirds discount.
- On VAT, the 5% reduced rate of VAT will be extended until the end of September, followed by an interim rate of 12.5% for six months after. The standard rate will return in April 2022.
- The chancellor highlighted the importance of addressing the government’s borrowing level to prevent debt rising indefinitely.
- He highlighted forecasts which suggest borrowing will fall to 4.5% by 2022-23 but said it would be the work of governments over many decades to fully pay back the country’s debt.
- The chancellor said it was not the time to set out detailed fiscal rules. He noted it was right for the government to borrow to get through the pandemic but in normal times, the government should not be borrowing to cover public spending. He admitted it was sensible to take advantage of lower interest rates to invest in capital projects that will drive growth.
- The chancellor announced the freezing of income tax rates and said he would not raise the rates, national insurance or VAT.
- For higher-rate tax payers, the threshold will be £50,270 and the basic rate will rise to £12,570 and will remain there until April 2026.
- The VAT registration threshold will remain at £85,000 until 2024.
- £100m will be provided to set up a new HMRC taskforce with 1,000 investigators to clamp down on tax avoidance and to address fraud.
- The rate of corporation tax will increase to 25% from April 2023, which remains the lowest in the G7. The chancellor confirmed it would only tax profits, meaning businesses that were struggling would not be affected. He added that businesses with profits over £250,000 would be taxed at this rate, which meant only 10% of companies would be impacted.
- Businesses can carry back losses of up to £2m for three years, while the bank surcharge will be reviewed to ensure the combined rate of tax on the banking sector doesn't increase significantly from the current level.
- The chancellor announced the creation of the super deduction policy, to allow businesses to reduce their tax bill by 130% if they invest.
The Union & Future
- The chancellor highlighted the ways the devolved administrations had benefitted from this Budget and the funding from the Treasury throughout the pandemic.
- He highlighted the accelerated Scottish City Deals for Ayrshire, Argyll & Bute and Falkirk, as well as the funding for the Aberdeen Energy Transition Zone.
- Rishi Sunak confirmed Scotland would receive an additional £1.2bn via the Barnett formula.
- Funding will be provided for 45 new town deals, while £150m will go to create a fund to allow local communities to take ownership of pubs, theatres and sports clubs.
- The chancellor concluded with the announcement that a new economic campus would be opening in Darlington for several government departments, including the Treasury, the Department for International Trade and the Department for Business, Energy & Industrial Strategy.