Chancellor Rishi Sunak unveiled the contents of his Budget 2021 in the House of Commons on 3rd March.
He announced the UK government’s tax and spending plans for the year ahead. However, the focus on helping business and jobs through the pandemic and supporting the UK’s long-term economic recovery will remain unchanged.
Here is a summary of the main points of the UK budget for 2021.
Coronavirus Support Programmes in budget 2021
The UK government will:
- extend the furlough scheme until the end of September 2021
- continue paying 80% of employees’ wages for hours they cannot work
- ask the employers to contribute 10% in July and 20% in August and September
- widen the access to grant to make 600,000 more self-employed people eligible for help
- extend £20 uplift in Universal Credit for another six months
- increase the minimum wage to £8.91 an hour from April
State of the Economy and Public Finances
- UK economy forecast to return to pre-Covid levels by the 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
- The 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 key points
- 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
- The main rate of corporation tax on company profits to rise from 19% to 25% in April 2023
- To keep the rate at 19% for about 1.5 million smaller companies
