Whilst usually we are only ‘treated’ to one Budget a year by the government, it’s safe to say that the last couple of years have been like no others, so yesterday, we were treated to our second budget of 2021 (the first having been announced in March this year).
After being chastised by the Deputy Speaker for releasing the details of a number of the Budget announcements to the media before announcing them to Parliament (as is expected), Chancellor Rishi Sunak took to the dispatch box for his third Budget of his career.
As part of the preamble, Mr Sunak stated that the UK economy is forecast to return to pre-Covid levels by 2022, with annual growth set to rebound by 6.5% this year. It is also expected that unemployment will peak at just 5.2% next year, down from the previously predicted 11.9%.
He then moved on to the Budget announcements themselves. Whereas the March 2021 Budget was much more focussed on the usual announcements in relation to personal allowances, corporation tax rates, and the Health and Social Care Levy announcement made in September detailed future NI and dividend rates, this Budget was much more detailing how the money was going to be spent, and measures to try and help the UK recover ‘post pandemic’.
Some of the main investment measures announced were:
• £1.7 billion to be invested in local areas as part of the ‘Levelling Up Fund’.
• £2.2 billion funding for courts, prisons, probation services etc, and funding to help clear the courts backlog.
• £6 billion to go to the NHS to try and tackle the huge backlog post pandemic.
• £2 billion new funding for schools and colleges to help them recover, with schools funding to return to 2010 levels in real terms.
• £5 billion fund to help remove unsafe cladding, which will be derived from a 4% levy imposed on property developers (with over £25 million profit).
As well as investment for various sectors to assist with recovery, there were also tax relief and financial support measures announced to help other sectors still struggling, as well as individuals:
• National Living Wage to increase next year by 6.6% from £8.91 to £9.50 per hour for individuals over 23.
• For those working and receiving Universal Credit, from 1st December 2021 at the latest, the taper rate will be adjusted so that the amount of benefit they lose for every pound they earn above their worker allowance will be reduced from 63p to 55p.
• The Museums and Galleries Exhibition Tax Relief will now be extended for a further two years to March 2024.
• Financial support for English airports to be extended for a further 6 months.
• The planned duty rises on alcohol and fuel have both been cancelled.
• There will be a 50% business rates discount for the retail, hospitality and leisure sectors in England in 22/23 (maximum £110k).
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