Budget 2021: Stamp duty, furlough, tax rises
Written by Hitmix News on 3 March 2021
What’s going to be in the budget? A lot of the big announcements have already been revealed, leaked, or guessed at. Here’s what to expect:
What time does the budget start?
You can watch and follow it all live with special coverage and analysis from 12.30pm.
A special edition of the Sky News Daily podcast taking in all of the chancellor’s announcements will be available to listen to from 7pm.
A mortgage guarantee scheme will help home buyers purchase properties worth up to £600,000 with a deposit of just 5% with the government underwriting the other 95%.
Image: Help for home buyers will be announced
Rishi Sunak could also reportedly extend the stamp duty holiday announced last summer on homes worth up to £500,000, currently due to run until the end of March.
Plans to begin to increase corporation tax from 19% to 23% by the next general election will reportedly be set out.
There are also reports that the chancellor will freeze income tax thresholds – a tactic which would not technically be a tax-raising measure but still drag employees into paying more as their salaries rise.
The furlough scheme, which had been due to expire at the end of April, will be extended until the end of September – meaning wages for millions temporarily laid off due to the coronavirus continuing to be subsidised.
Another 600,000 people will also be eligible for grants, including many of the self-employed who previously missed out.
Hard-hit firms will be hoping for an extension to business rates relief and VAT cuts.
Already confirmed is a £5bn scheme to help firms such as shops, pubs, clubs, gyms and hair salons hardest hit by the pandemic restrictions with grants of up to £18,000.
There will also be £520m to help businesses boost their software and training.
Image: Pubs have been among the worst hit sectors
The £20-a-week temporary increase in universal credit is expected to be extended for a further six months.
Will there be a new version of Eat Out To Help Out? Mr Sunak has declined to rule it out in the past.
But it’s possible the government will want to be a bit more cautious this time.
Community groups will be given up to £250,000 to help take over struggling pubs in their area, part of a £150m could also include sports clubs, theatres and music venues.
More than £400m will be allocated to help museums, theatres and galleries reopen in England and there will be a £300m package for sports – much of it targeted at cricket.
There will be a further £1.65bn for the UK’s vaccine rollout.
Image: An extra £1.65bn will go towards the vaccine roll out
Back in November the chancellor said the government was on course to spend £280bn on the coronavirus crisis in 2020/21 and £55bn in 2021/22. The figures are likely to be updated in the wake of the latest measures.
Back in the autumn, the independent Office for Budget Responsibility (OBR) said borrowing for 2020/21 would hit £394bn.
The Institute for Fiscal Studies (IFS) now thinks this will come in at around £400bn.
The OBR will also forecast how quickly the economy could bounce back after suffering its deepest annual decline for three centuries last year when GDP shrank by 9.9%.
In November, it pencilled in growth of 5.5% for 2021.
The Bank of England thinks the roll-out of vaccines will mean a rapid recovery later this year but that, held back by the current lockdown, the economy will expand by 5% overall in 2021.