Chancellor Rishi Sunak has unveiled the contents of his Budget in the House of Commons, announcing the government’s tax and spending plans for the year ahead.
Here is a summary of the main points:
Coronavirus support
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
Taxation
- 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
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.
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