LiveBudget 2021 Leeds: Key points in full as Chancellor unveils Budget for furlough, mortgages wages & more
All the latest updates as the Chancellor unveiled the Budget.
Rishi Sunak extended the furlough scheme until the end of September and pledged to do “whatever it takes” to help people and businesses through the coronavirus crisis when he unveiled his Budget.
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Budget 2021 Leeds: Live updates as Chancellor unveils Budget
Last updated: Wednesday, 03 March, 2021, 13:31
- - £5 billion for a new grant scheme to help businesses
- – £1.65 billion to boost the UK’s vaccine roll-out.
- – £520 million to support small UK businesses with training and software.
- – Nearly £410 million to support the badly-hit culture sector.
- – £150 million to help local communities save struggling pubs, sports clubs, theatres and Post Offices.
- – £300 million to help cricket, tennis and horse racing in a summer sports recovery package.
- – £2.8 million to help fund a joint UK and Ireland bid to host the 2030 football World Cup.
Concluding, Rishi Sunak told MPs: “Today we set out a plan to protect the jobs and livelihoods of the British people but the promises that underpin that plan remain unchanged from those we pledged ourselves to 12 long months ago.
“To unite and lead, to level up, to create a world-class education system, to keep our streets safe, to keep our NHS strong, to support the most vulnerable, to reform and improve public services, to grow the economy, to spread prosperity, to extend the awesome power of opportunity to all corners of the United Kingdom, and, yes, to be honest and fair in all that we do.
“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.”
Rishi Sunak added a taper above £50,000 will also be introduced to ensure only businesses with profits of £250,000 or greater will be taxed at the full 25% rate.
He told MPs: “That means only 10% of all companies will pay the full higher rate. So yes, it’s a tax rise on company profits, but only on the larger, most profitable companies – and only in two years’ time.”
Mr Sunak also said: “For the next two years, I’m also making the tax treatment of losses significantly more generous by allowing businesses to carry back losses for three years, providing a significant cash flow benefit.
“This means companies can now claim additional tax refunds of up to £760,000. And because of the current 8% bank surcharge, the implied overall tax rate for banks would be too high. So we will review the surcharge, to make sure the combined rate of tax on the UK banking sector doesn’t increase significantly from its current level – and to make sure this important industry remains internationally competitive.”
Rishi Sunak said the UK will have a “pro-business tax regime” but more needs to be done to encourage immediate investment.
He told MPs: “While many businesses are struggling, others have been able to build up significant cash reserves. We need to unlock that investment, we need an investment-led recovery.
“So today I can announce the ‘super deduction’. For the next two years, when companies invest they can reduce their tax bill, not just by a proportion of the cost of that investment, as they do now, or even by 100% of the cost, the so-called full expensing some have called for – with the super deduction they can now reduce their tax bill by 130% of the cost.”
It is forecast to boost business investment by 10%, or around £20 billion extra per year, Mr Sunak said.
On duties, Rishi Sunak told MPs: “I can confirm that the planned increases in duties for spirits – like Scotch Whisky – wine, cider and beer will all be cancelled.
“All alcohol duties frozen for the second year in a row – only the third time in two decades.
“And 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.”
Inheritance tax thresholds, the pensions lifetime allowance, and the annual exempt amount in capital gains tax will be maintained at current levels until April 2026, according to Rishi Sunak.
He added: “We’ll also tackle fraud in our Covid schemes, with £100 million to set up a new HMRC taskforce of around 1,000 investigators, as well as new measures, and new investment in HMRC, to clamp down on tax avoidance and evasion.”
Rishi Sunak also told MPs: “Nobody’s take home pay will be less than it is now, as a result of this policy.
“But I want to be clear with all members that this policy does remove the incremental benefit created had thresholds continued to increase with inflation.
“We are not hiding it, I am here, explaining it to the House and it is in the Budget document in black and white. It is a tax policy that is progressive and fair.”
Rishi Sunak said borrowing costs are “affordable right now” but warned interest rates and inflation may not stay low.
He told MPs: “This Budget is not the time to set detailed fiscal rules, with precise targets and dates to achieve them by – I don’t believe that would be sensible.
“But I do want to be honest about what I mean by sustainable public finances, and how I plan to achieve them.”
Rishi Sunak said the forecasts show that this year the Government has borrowed a “record” £355 billion, the equivalent of 17% of the UK’s national income.
He told MPs: “Next year, as we continue our unprecedented response to this crisis, borrowing is forecast to be £234 billion, 10.3% of GDP – an amount so large it has only one rival in recent history – this year.”
Mark Whincup, Purplebricks spokesperson for Leeds, told the Yorkshire Evening Post:
“Many people who initially purchased a property hoping to make the March deadline will now be feeling a great sense of relief about the extra time they have to complete on their purchase, without having the worry of paying for Stamp Duty.
“With many people reassessing their needs and their priorities during the Covid pandemic, today’s news of the Stamp Duty extension is likely to spur more people onto the market. Whether buyers want a bigger garden, a home office or space for a home gym, now is the time for them to find their dream home.”
“Today’s announcement is a real boost for first time buyers, many of whom need a helping hand onto the property market. In Leeds, there are several first time buyer hotspots, including Chapel Allerton and Meanwood, which are trendy spots with bars, cafes and good schools. Kirkstall and Bramley are also popular, with plenty of affordable homes and great transport links into the city centre. And Falsely has a lovely village feel to it, with plenty of good schools for families.”
Rishi Sunak also announced a “mortgage guarantee”, telling MPs: “Lenders who provide mortgages to homebuyers who can only afford a 5% deposit will benefit from a Government guarantee on those mortgages.
“I’m pleased to say that several of the country’s largest lenders including Lloyds, NatWest, Santander, Barclays and HSBC will be offering these 95% mortgages from next month, and I know more, including Virgin Money will follow shortly after.
“A policy that gives people who can’t afford a big deposit the chance to buy their own home. As the Prime Minister has said, we want to turn generation rent into generation buy.”
Rishi Sunak said the 5% reduced rate of VAT will be extended for six months to September 30, telling MPs: “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 £5 billion.”
Rishi Sunak said a “new restart grant” will be provided in April to help businesses reopen.
He told MPs: “Non-essential retail businesses will open first, so they’ll receive grants of up to £6,000 per premises.
“Hospitality and leisure businesses, including personal care and gyms, will open later, or be more impacted by restrictions when they do, so we’ll give them grants of up to £18,000.
“That’s £5 billion of new grants, on top of the £20 billion we’ve already provided.”
Rishi Sunak announced an extra £19 million for domestic violence programmes, telling MPs: “To reduce the risk of reoffending, and to pilot a network of ‘respite rooms’ to provide specialist support for vulnerable homeless women, to recognise the sacrifices made by so many women and men in the armed forces community, I’m providing an additional £10m to support veterans with mental health needs.”
Rishi Sunak said the £20 weekly increase for Universal Credit will continue for a further six months.
He also said the minimum wage will increase to £8.91 an hour from April.
On apprenticeships, Mr Sunak said: “I’m doubling the incentive payments we give businesses to £3,000 – that’s for all new hires, of any age.”
Rishi Sunak said the full 80% grant will be given to people whose turnover has fallen by 30% or more, telling MPs: “People whose turnover has fallen by less than 30% will therefore have less need of taxpayer support and will receive a 30% grant.”
On changes to the self-employed scheme, the Chancellor said: “When the scheme was launched, the newly self-employed couldn’t qualify because they hadn’t all filed a 2019/20 tax return.
“But as the tax return deadline has now passed, I can announce today that, provided they filed a tax return by midnight last night, over 600,000 more people, many of whom only became self-employed last year, can now claim the fourth and fifth grants.”