Rishi Sunak, the Chancellor of the Exchequer has unveiled the contents of his budget and set out the tax and spending plans of the government for the year ahead in the House of Commons. He announced new measures that the government is going to take in order to help jobs and businesses through the Covid-19 pandemic. According to him, these measures will definitely help in supporting the long-term economic recovery of the UK. A series of tax-raising plans was also unveiled in the House of Commons that will help in rebalancing the public finances.
Here at Majestic Chartered Accountants, we have provided you a brief explanation of the measures announced by Chancellor Rishi Sunak in the UK Budget 2021 .
- An extra fund of £1.65 billion has been put forward by the government so that the Covid-19 vaccination roll-out continues to be a success in England as it is now.
- £28 million for increasing the capacity of the UK for vaccine testing, supporting clinical trials, and improving the ability to acquire samples of Covid-19’s new variants.
- A fund of £22 million has been put forward for a world-leading study regarding the effectiveness of testing of different combinations of the Covid-19 vaccines. This fund also includes the world’s first study evaluating the effectiveness of the 3rd dose of the Covid-19 vaccine to improve the response against the future and current variants of Covid-19.
- In order to create a ‘library’ of vaccines that can work against the variants of Covid-19, a fund of £5 million with a previous £9 million investment in clinical-scale mRNA manufacturing has been put forward by the government in 2021 Budget. This will make the process the process of rapid response deployment a lit bit easier.
- The Test and Trace support payments in England have been extended by £500 until the summer.
Protecting the jobs and livelihoods of people
- Extension of Covid-19 Job Support Scheme and the UK-wide Self Employment Income Support Scheme to September 2021.
- Until September, there has been an extension to the temporary cut in the Stamp Duty Land Tax. It will create and protect jobs and support the housing market.
- With the new mortgage guarantee scheme, homebuyers will now be able to secure a mortgage up to £600,000.
- A fund of £18,000 has been put forward by the government for personal care, leisure, accommodation, hospitality, and gym businesses in England.
- The Film & TV Production Restart Scheme has been extended in the UK with an additional fund of £300 million in order to support museums, theaters, and other cultural organizations in England.
The strengthening of Public Finances
- From April 2021 levels to 2026, tax-free personal allowance to be frozen at £12,570.
- The government is going to invest £25bn by allowing Accounting companies in London companies a 130% super-deduction on tax for investments.
- No tax is charged on sales of less than £500,000.
- Alcohol duties will be frozen across the board for the second year running saving drinkers £1.7 billion.
Investment in the Environment, transport, infrastructure, and housing
- In order to help finance the transition to net-zero by 2050, a fund of £15bn has been put forward by the government in green bonds, including for retail investors.
- The chancellor confirms a mortgage guarantee to help first-time buyers access 95% mortgages.
- The Bank will partner with the local government as well as with the private sector in order to increase infrastructure investment. It will help to tackle climate change and promote economic growth across England.
- £4 million for a biomass feedstocks program in the UK to identify ways to increase the production of green energy crops and forest products that can be used for energy.
Other Nations and regions
- £1bn funds to promote regeneration in a further 45 English towns, including Middlesbrough, Preston, Swindon, Bournemouth, Newark, West Bromwich, and Ipswich
- Almost half of the £400 million New Deal for Northern Ireland funding has been allocated, subject to business cases, to new systems for supermarkets and small traders to manage new trading arrangements.
- Through the Barnett formula, the Budget has confirmed an additional £2.4 billion for the devolved administrations for 2021-22. This is an additional £1.2 billion for the Scottish Government, £740 million for the Welsh Government, £410 million for the Northern Ireland Executive.