Here are the key points from Chancellor Rishi Sunak’s budget speech:
• Government will continue doing “whatever it takes” to support British people and businesses as well as starting to fix public finances and beginning to build the future economy
• Economy expected to return to pre-COVID levels by the middle of next year, six months earlier than previously thought
• GDP growth forecast for this year downgraded to 4% (from 5.5%) according to Office for Budget Responsibility
• Unemployment expected to peak at 6.5%, lower than the 11.9% forecast in July
• Chancellor confirms furlough scheme will be extended until the end of September, with the government paying 80% of salary though employers will asked to put in 10% from July and 20% from August
• Help for the self-employed will also be extended with changes meaning 600,000 more people will be eligible
• The temporary increase of £20 a week in universal credit will continue for a further six months
• Incentive payments for hiring new apprentices are being doubled to £3,000 while £126m will be invested to triple the number of new traineeships
• An extra £19m has been announced for domestic violence programmes while £10m will support veterans with mental health needs
• There will be £40m for victims of the Thalidomide scandal and a lifetime commitment to funding them
• The chancellor confirms £5bn of new grants for hard hit firms – worth up to £6,000 for non-essential retailers and £18,000 for restaurants, pubs, personal care and gym businesses which will reopen later
• A total of £700m will go on supporting arts, culture and sports as they reopen
• Bounce-back and other coronavirus loans for businesses will be replaced by a new recovery loan scheme 80% guaranteed by the government
• The business rates holiday for retail, hospitality and leisure sector businesses has been extended to the end of June and for the remaining nine months of the fiscal year they will still be discounted by up to two thirds
• Reduced rate of 5% VAT for the hospitality and tourism sectors has been extended to the end of September, and will only go up to 12.5% after that, before returning to 20% next April.
• The stamp duty holiday on properties worth up to £500,000 will be extended from the end of March until the end of June and after that there will still be no duty on homes worth up to £250,000 for another three months. After that the threshold returns to the usual level of £125,000 from October.
• Mr Sunak confirms that the government will guarantee 95% mortgages to help those who can only afford a 5% deposit
• An additional £65bn in spending in response to coronavirus takes total fiscal support to £407bn
• Forecasts show government borrowing reaching £355bn in 2020/21, of 17% of the national income – the highest level since the Second World War. For 2021/22 if climbs to £234bn, 10.3% of GDP. Debt will peak at 97.1% of GDP in 2023-24.
• Personal income tax thresholds will be frozen from next year until 2026 – at £12,570 for the basic rate and at £50,270 for the higher rate
• Thresholds for inheritance tax, pensions lifetime allowance and capital gains tax thresholds are also being frozen
• To tackle fraud in COVID support schemes there will be £100m to set up an HMRC taskforce with 1,000 investigators
• Corporation tax is to increase to 25% in April 2023 – but it will still be the lowest rate in the G7, says the chancellor. However 70% of companies – with profits of £50,000 or less will still only be liable for the current 19% rate while only those with profits of £250,000 or more will pay the full 25%.
• Companies will be able to offset losses against their tax bills going back up to three years, allowing them to claim additional refunds of up to £760,000
• There will be a review of the current 8% bank surcharge to make sure they do not have to pay too much and that the sector “remains internationally competitive”
• A “super-deduction” to incentivise business investment will mean they can reduce their taxable income by 130% of the amount they invest
• Planned increases in duties on beer, cider, spirits and wine as well as fuel will be cancelled
• The first ever UK Infrastructure Bank will be set up, in Leeds, with an initial capitalisation of £12bn – to finance public and private sector “green industrial revolution” projects
• Consumers will be able to put their money into a new savings product to support green projects
• A new group will be set up to position the City as the global leader for carbon offset markets
• The Bank of England’s remit will be updated “to reflect the importance of environmental sustainability and the transition to net zero” as well as the 2% inflation target
• A “help to grow” scheme will offer smaller businesses management and digital training
• £1.6bn will go towards continuing the vaccine roll-out and improving future preparedness
• Visa reforms are being introduced to make it easier to attract the “best and most promising international talent” in science, research and tech
• Rules will also be changed to allow pension funds to plough billions into innovative new ventures and, in line with a review by Lord Hill, to encourage more companies to float in London
• Under a national spending formula, the budget will mean £1.2bn more for the devolved administration in Scotland, £740m for Wales and £410m for Northern Ireland
• The Treasury and other key economic departments will set up a new economic campus in Darlington
• There will be £1bn for 45 new public investment “town deals” across the country
• Eight freeports – special economic zones with different rules to make it cheaper and easier to do businesses – have been announced at: East Midlands airport; Felixstowe and Harwich; Humber; Liverpool city region; Plymouth; Solent; Thames; and Teesside.
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