Budget 2021: What we’re expecting
Tax rises and handouts, everything we (think) we know is coming
The national debt is close to two thousand billion pounds and the huge increase in public spending largely as a result of the furlough scheme has led the Chancellor to conclude he needs to start paying some of it back. But where is he getting the money from, and which hand-outs will he keep?
Here’s 13 things we (think) we know are coming out of Rishi’s red box today.
- Income tax to rise: According to Sunday Times political editor Tim Shipman, Rishi Sunak is plotting a rise in income tax by freezing the point at which people start paying the basic rate of income tax at £12,500, and the threshold at which they begin paying the higher 40p rate at £50,000.
- Corporation tax to rise: Shipman also reported that corporation tax would rise gradually from 19 percent to an eventual 25 percent, and that Boris Johnson blocked him from doing it in one go. – Sunday Times
- Furlough scheme extended: Originally due to end by April, the FT reported in mid-February that the furlough scheme would be continued into Summer before being phased out. (Confirmed by the Treasury last night) – FT
- VAT cut for hospitality extended: “While lockdown persists”, the business secretary has said the VAT cut will remain and confirms the FT story that furlough would be extended – BBC News
- Business rate holiday extended: The scrapping of business rate tax that retailers have enjoyed during the pandemic was set to end on March 31 but it is reported that the Chancellor will continue it – City AM
- Help to buy: The Budget is expected to provide financial support for people to get onto the property ladder and also to remove rules which led to banks asking for high deposits and instead allowing them to accept 5% of the property value. – Telegraph
- A extension of the stamp duty holiday: Nervous house-buyers and estate agents hoping to complete sales under £500,000 before the end of the month can breathe a sigh of relief as stamp duty will not be reimposed until the end of June, according to The Times
- Self-employed worker grant: The Telegraph reports that self-employed people who meet the criteria will be able to claim 80 per cent of their average monthly profits up to a maximum of £2,500 a month – Telegraph
- Hospitality hand-outs: A £5bn scheme for High Street shops and hospitality firms in England will provide “restart grants” to replace the current grant system – BBC News
- Universal Credit: The “emergency” £20-a-week extra in universal credit payments was due to expire at the end of March but is expected to be extended by six months.
- Infrastructure Investment: The Government has announced plans to put £22bn of capital and loan guarantees into the new UK Infrastructure Bank, set up to fund major infrastructure projects.
- Green Savings Bonds: The Chancellor says the creation of Green bonds means UK savers will have “the opportunity to contribute to the collective effort to tackle climate change” by investing in green technology.
- £100 contactless limit: The Treasury announced this morning that the limit for contactless payments would rise to £100. Although it is legally permitted from today, it will take months for banks to make the change.
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