Budget 2021 summary: Key highlights from self employment grants to stamp duty holiday extension

RISHI Sunak today revealed the 2021 Budget – announcing measures covering everything from mortgage help to cash for the extended furlough scheme.

The Chancellor insisted that despite the last year being a “test unlike any other”, the determination of the UK would guide the country through as he released a £65 billion lifeline for the economy as it emerges from the pandemic.

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The chancellor said: “An important moment is upon us. A moment of challenge and of change. Of difficulties, yes, but of possibilities too.

“This is a budget that meets that moment.”

The Office for Budget Responsibility (OBR) is now forecasting “a swifter and more sustained recovery” than they expected in November, predicting the economy will be 3% smaller than it would have been in five years’ time because of the coronavirus crisis.

TAX RISES & FREEZES

Millions of hard-working Brits will be hit by a stealth tax rise from today’s Budget.

In his Budget today, Mr Sunak said the tax-free personal allowance – the amount you can earn before paying tax – will remain at £12,500.

For higher rate tax payers, the threshold will stay at £50,000.

Although Mr Sunak stopped short of increasing taxes, a freeze to these thresholds is essentially a pay cut, once you take into account the rate of inflation.

He also confirmed today:

FURLOUGH EXTENDED

The furlough scheme is set to be extended until the end of September as part of Rishi Sunak’s Budget.

Under current rules, employees on furlough get 80% of their usual salary, up to £2,500 a month, for hours not worked.

This is expected to continue until July, when bosses will then be asked to start contributing costs until the scheme finishes in September.

Furlough was due to stop at the end of April, meaning it will last an extra five months beyond this date.

In total, the extension also means furlough will have run for a gruelling 17 months during the coronavirus pandemic.

MORTGAGE SCHEME

First-time buyers struggling to secure a mortgage are able to get on the property ladder with just a 5% deposit thanks to the Budget.

The Chancellor unveiled the scheme in today’s Budget, which will see the government back mortgages for buyers with a deposit of just 5% on homes worth as much as £600,000.

It means that if the borrower is unable to pay one month, the state will pick up the bill – although it is highly likely there will still be repercussions for borrowers if this happens.

The scheme will slash the minimum amount first-time buyers need to purchase their own home in half.

STAMP DUTY HOLIDAY

The Government’s stamp duty tax relief has been extended until September, the Chancellor announced in the Budget.

The temporary stamp duty holiday for homes worth up to £500,000 was due to expire on March 31, but has been extended by three months until June.

From July, the tax-free threshold will drop for home buyers to £250,000 until September, when it will return to its normal limit at £125,000.

Mr Sunak told the House of Commons: “I can announce today the £500,000 nil rate band will not end on 31st of March, it will end on June 30.

“Then, to smooth the transition back to normal, the nil rate band will be £250,000, double its standard level, until the end of September – and we will only return to the usual level of £125,000 from October 1.”

The rates apply to home buyers in England and Northern Ireland only, as they differ for those buying homes in Scotland and Wales.

MORE GRANTS AND SELF EMPLOYED HELP

Self-employed workers will get a fourth coronavirus grant worth £7,500, Mr Sunak confirmed today.

The grants will cover lost earnings through February, March and April before extending from May to September as a result of the coronavirus crisis.

Speaking in the Commons today, Mr Sunak said: “We will continue to do whatever it takes to support the British people.”

He later added: “An important moment is upon us. A moment of challenge and of change. Of difficulties, yes, but of possibilities too. This is a Budget that meets that moment.”

Under the grant, those whose turnover has fallen by 30% or more will continue to receive the full 80% grant.

People whose turnover has fallen by less than 30% will therefore have less need of taxpayer support and will receive a 30% grant.

It will mean more than 600,000 individuals could be newly eligible for the assistance.

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EXTENSION OF HELP

Brits are set for cheaper pints and meals out this summer after Rishi Sunak today announced he is extending a VAT cut for the hospitality industry.

The 5% reduced rate of VAT will be extended for six months to 30th September.

And the standard rate won’t be returned to until April next year, with an interim rate of 12.5% for another six months after September.

In total, the move will see VAT cut by almost £5bn.

Speaking today, Mr Sunak said: “One of the hardest hit sectors has been hospitality and tourism: 150,000 businesses that employ over 2.4 million people need our support.

“To protect those jobs, I can confirm that the 5% reduced rate of VAT will be extended for six months to 30th September.

“And even then, we won’t go straight back to the 20% rate. We’ll have an interim rate of 12.5% for another six months; not returning to the standard rate until April next year. In total, we’re cutting VAT next year by almost £5bn.”

He also announced the temporary £20-a-week increase in Universal Credit payments will continue for a further six months.

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FUEL DUTY FREEZE

Fuel duty will be frozen at this week’s Budget for the TENTH year running in a major victory for the Sun’s legendary Keep It Down campaign.

Boris Johnson said: “I firmly believe that the economic recovery is going to be powered by white van man amongst others.”

Unveiling the Budget Mr Sunak said: “Right now, to keep the cost of living low, I’m not prepared to increase the cost of a tank of fuel.

“So the planned increase in fuel duty is also cancelled.”

VACCINE ROLLOUT CASH

The UK’s Covid vaccine rollout will receive a £1.65 billion boost in today’s Budget.

Britain is on track to jab every UK adult by July as the rollout goes from strength to strength.

GREEN TEAM

The government will issue its first sovereign green bond – or green gilt – this summer, with a further issuance to follow later in 2021.

The green gilt framework, to be published in June, will detail the types of expenditures that will be financed to help meet the government’s green objectives.

The government also commits to reporting the contributions of green gilt spending towards social benefits such as job creation and levelling up.

ALCOHOL AND CIGS

The tobacco duty had been expected to rise following two increases last year, but it was left out of the Chancellor’s statement.

In last year’s Budget, Rishi Sunak hiked the tobacco duty by an extra 2% above the inflation rate at the time of 1.8% – adding 27p to a pack of fags.

The change pushed the average pack of the most expensive cigarettes in the big four supermarkets from £12.46 to £12.73.

While the average pack of the cheapest 20-pack of fags rose from roughly £8.82 to £9.10.

They then rose again on November 16 following the Spending Review, adding another 22p to a pack of 20 cigarettes.

However, given the rates were set in the Spending Review, they will not rise again for now, the Treasury has confirmed to The Sun.

They could still increase in future, but this would be revealed in further announcements by the Chancellor.

Mr Sunak also froze all alcohol duties for the second year in a row.

FREEPORTS

Britain’s economic recovery will be powered by the creation of eight new Freeports to turbocharge post-Brexit growth, Rishi Sunak announced today.

Freeports are areas which allow companies importing and exporting from the UK to operate under simplified customs, tax, and planning rules.

They are a key plank in the Government’s plan to diversify our trade away from Europe and strike up commercial links with the rest of the world.

And the new blueprint is also intended to play an important part in kickstarting the country’s efforts to build back from the pandemic.

Financial experts predicted a bumper 7 per cent growth in GDP next year – which would be the strongest set of figures since World War II.

And the UK economy would completely recover from the pandemic by the middle of next year, they claim.

But coming down the track, Mr Sunak revealed billions of pounds worth of stealth tax rises would come in over the next five years – including corporation tax, capital gains and freezing several other perks.

This post first appeared on thesun.co.uk