Attention to the budget always rises in times of economic hardship and uncertainty, and this is as true as ever in an economy that has been hit both by COVID and Brexit adjustments.
The Labour opposition pointed out that the depressed economy has exposed severe vulnerabilities in society – 4m children now in poverty, 1m youth unemployment and higher overall unemployment, key workers and the NHS all cash-strapped, and businesses burdened by debt.
Could the budget have been adjusted so that the groups least able to shield themselves from its effects were offered more support?
The key points of what has been done are set out in the below points and a more detailed yet still very compact PDF table-format summary can be downloaded from the above link.
- Job Retention Scheme (JRS): to be extended to Sept 2021, 80% of normal wage (capped at £2,500) funded to June 2021, then phased additional employer contributions of 10% in July, 20% in Aug and 20% in Sept.
- Self Employed Income Support Scheme (SEISS): two further grants Feb-April; and May-Sept. For May to Sept grants, it will be 80% of average profits if turnover has fallen by more than 30%; if turnover has fallen less than 30%, the grant will be 30%. Newly self-employed can use their 19/20 tax return numbers if filed by 2 March 2021.
- Restart Grants: non-essential retail up to £6,000 per premises; hospitality leisure and personal care will be up to £18,000.
- Business Rates Relief: 100% relief for retailers etc given last year, to be extended to June 2021; then will be up to a 2/3rd discount for the remainder of the 21/22 rates year.
- Recovery Loan Scheme: new loan scheme for loans £25k to £10m for applications to be made any time this year, with 80% government guarantee to lenders. (BBL and CBILs loan schemes not further extended.)
- Hospitality & Tourism: 5% reduced VAT rate to be extended to 30 Sept, then 12.5% for a further 6 months, returning to standard rate from April 2022.
- Stamp Duty Nil Rate Band: £500k nil rate band extended for a further 3 months to 30 June, then £250k nil rate band to 30 Sept, return to usual £125k nil rate band from 1 October.
- Deposit Scheme: New scheme for 5% deposit mortgages for homes up to £600k, with government backing.
- Personal Tax Rates: Personal allowance will increase to £12,570 for 21/22 and basic rate limit will increase to £50,270. However, both will then be frozen until April 2026.
- Freezing Other Tax Limits: Capital gains annual exempt amount, IHT allowances, pension lifetime allowance frozen until April 2016. VAT registration and deregistration thresholds frozen for 2 years from 1 April 2022.
- Corporation Tax Rate: increase to 25% from April 2023. 19% small profits rates for up to £50k of profits, then tapering of the rate up to £250k profits.
- Corporation Tax Losses: for next 2 years, loss carry back extended from 1 to 3 years carry back, for up to £2m of losses.
- Corporation Tax Relief for Business Investment: new super deduction for 2 years of 130% of the cost of new plant and machinery.
- Duties: alcohol and fuel duties frozen.
- Green Investment: new £15bn green investment bank to fund infrastructure projects and new retail savings products for individuals to invest in.
- Help to Grow for SMEs: new management training with government funding 90% of costs; new digital training and software incentives, can register at helptogrow.
- Tech & Science: 2 new consultations into R&D tax credits and EMI management incentive schemes. New VISA schemes.
- Other: Review into unlocking Pension Fund investment capital; and review of listing rules in the UK.