“A budget which will continue to support the economy as well as trying to pay back the costs of borrowing in the future.
Furlough extended, coronavirus support extended, no change to rates of income tax. Corporation tax to shoot to 25% by 2023.”Nigel Holland
Chancellor Rishi Sunak is unveiling the contents of his Budget in the House of Commons.
He is announcing the government’s tax and spending plans for the year ahead, expected to focus on helping business and jobs through the pandemic and supporting the UK’s long-term economic recovery.
Here is a summary of the main points, which are being updated as he speaks.
A number of spending commitments have already been announced. They include:
- 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
- 600,000 more self-employed people will be eligible for help as access to grants is widened
- £20 uplift in Universal Credit to be extended for another six months
- Minimum wage to increase to £8.91 an hour from April.
State of the economy and public finances
- UK economy forecast to return to pre-Covid levels by middle of 2022
- Annual growth set to rebound by 4% this year, followed by 7.3% growth in 2022
- Unemployment expected to peak at 6.5% next year, lower than 11.9% previously predicted
- UK to borrow a peacetime record of £355bn this year.
- Borrowing to total £234bn in 2021-22
- Debt as a share of GDP to fall from 4.5% next year to 3.5% in 2022-23
- 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
Health and education
- £19m for domestic violence programmes, funding network of respite rooms
- £40m of funding for Thalidomide victims and lifetime support guarantee
The arts and sport
- £400m to help arts venues in England, including museums and galleries, re-open
- £300m recovery package for professional sport and £25m for grassroots football
Business, digital and science
- Incentive grants for apprenticeships to rise to £3,000 and £126 for traineeships
- VAT cut 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 will continue from April until June
- £5bn in re-opening grants for non-essential businesses of up to £6,000 per premises.