BUDGET 2021: Key measures announced in this year’s spending and tax plans
Yesterday (3 March), Chancellor Rishi Sunak presented the 2021 Budget to Parliament, outlining the key spending and tax plans to aid in the UK’s economic recovery.
Rishi said that the Budget presents a three-part plan to protect jobs and livelihoods by offering support, fixing finances and building future economy.
The budget follows the UK Government’s recently announced lockdown exit roadmap, as the nation begins to gradually ease restrictions as coronavirus levels continue to fall.
This year’s budget is set in the context of recovery from the global COVID-19 pandemic, which has seen the UK face unprecedented economic difficulties. For instance, the document outlines figures from the ONS that GDP in the UK for 2020 as a whole fell by 9.9 per cent – the largest annual fall in 300 years.
To help turn around this situation, Rishi said that the 2021 Budget outlines plans to ‘unite and level up’ the UK’s economy.
A number of measures have been included to protect jobs and livelihoods. These include an extension of the Coronavirus Job Support Scheme to September 2021 across the UK, meaning people can continue to take advantage of the vital furlough scheme.
There will also be an extension of the UK-wide Self Employment Income Support scheme to September 2021, with 600,000 more people who filed a tax return in 2019-20 now able to claim for the first time.
There have also been a number of COVID-19 funding measures announced in the budget.
Rishi confirmed an extra £1.65 billion cash injection to ensure the COVID-19 vaccination roll-out in England continues to be a success. Furthermore, the UK Government is investing £28 million to increase the UK’s capacity for vaccine testing, support for clinical trials and improve the UK’s ability to rapidly acquire samples of new variants of COVID-19.
An additional £22 million for a world-leading study to test the effectiveness of combinations of different COVID-19 vaccines was also unveiled. This will also fund the world’s first study assessing the effectiveness of a third dose of vaccine to improve the response against current and future variants of COVID-19.
Businesses with profits of £50,000 or less, will continue to be taxed at 19 per cent. However, a taper above £50,000 will be introduced in 2023 so that only businesses with profits greater than £250,000 will be taxed at the full 25 per cent rate.
Approximately 750,000 eligible businesses in the retail, hospitality and leisure sectors in England will benefit from business rates relief. There will be an extension of the apprenticeship hiring incentive in England to September 2021 and an increase of payment to £3,000.
A new “flexi-job” apprenticeship programme in England worth £7 million will enable apprentices to work with a number of employers in one sector. In addition, £126 million will be made available for 40,000 more traineeships in England, funding high quality work placements and training for 16–24-year-olds in 2021/22 academic year.
Additionally, small and medium-sized employers in the UK will continue to be able to reclaim up to two weeks of eligible Statutory Sick Pay (SSP) costs per employee from the UK Government. To further support the cashflow of businesses, the government is extending the loss carry back rules worth up to £760,000 per company.
However, there was no funding mentioned for social care or disabled people, which goes against ADASS’ recent call for the 2021 Budget to put meeting the needs of older and disabled people, carers, and families at the heart of the UK’s economic recovery.