Published: 09 March 2021
During today’s budget 2021 announcement, Rishi Sunak has set out his plans to recover the economy in the post-Covid world. The Chancellor started his speech by highlighting that the government will continue doing everything it takes to support British people and businesses.
Rishi Sunak announced that the total Covid-19 support package cost the Government £352 billion. As far as we know, this is the highest level of borrowing since World War 2. Two key steps have been introduced to ensure that the economy will recover quickly and the government’s debt will not be rising.
Firstly, the government will freeze income tax thresholds. From April 2023, the Corporation Tax will be raised. Only firms earning £250,000 or above will pay the full rate. Chancellor added the UK would still have the lowest corporation tax rate of the G7 countries.
Rishi Sunak guaranteed that there will be no increase in personal tax, national insurance contributions and VAT.
As expected, the furlough scheme has been extended until the end of September with no changes for employees. However, businesses will have to contribute a small amount towards furlough payments once they reopen. Fourth and fifth grants will be available as financial support to self-employed. Support for low-income households will continue to be provided.
Stamp Duty Holiday extension until 30th June has been warmly welcomed by home-buyers in the UK. There was one more announcement, which was highly expected by young people looking to get on the property ladder. Chancellor introduced a new mortgage guarantee scheme which will help people with only 5% deposit get a mortgage. 95% loan-to-value mortgages will be available already next month from the major banks in the UK.
Great financial support will be available for business in the UK. There will be restart grants to help businesses reopen. Retail businesses will receive grants up to £6,000 per premises while hospitality and leisure businesses, including personal care and gyms, will receive grants up to £18,000. £700 million will be given to support art, culture and sporting institutions once they reopen.
Angelina Patterson, Marketing Manager at Why Media, comments: ‘’It’s great to see the UK’s government continuing to support British people and businesses. We are particularly happy for our clients in retail as these businesses especially require financial support. We are also pleased about changes including the mortgage guarantee scheme which will support the housing market and our client in real estate!’’
The government is committed to end low pay and increase the national minimum wage from April. It’s predicted that the economy will grow by 4% this year. The chancellor also mentioned that the economy will return to the pre-Covid level in the middle of next year, which is six months earlier than expected.
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