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03 March 2021

Sunak targets the economy in COVID-relief Budget

Today’s budget announcement was as expected as Chancellor Rishi Sunak unveiled his plans.
 
Various methods of Coronavirus support were announced, including extending the furlough scheme to September, an increase to minimum wage and further grants. Funding was also announced for sports and arts.
 
Within the business sector, grants as incentives for apprenticeships were included in the budget along with re-opening grants for non-essential businesses. To help out the hospitality sector the VAT cut is to be maintained at 5% until September and all business rates holidays for firms in England will continue until June.
 
For taxation, there is no change to rates of VAT, income tax or NI and the personal income tax allowance is to be frozen at £12,570 from 2022 to 2026. The higher rate income tax threshold will also be frozen at £50,270 until 2026. Corporation tax will rise from 19% to 25% in April 2023, but for smaller companies the rate will be kept at 19%.
 
Today’s budget announcement maps a fairly robust move towards both helping ailing sectors of the economy and continuing to help those in need. The extension of the furlough scheme until September should ease the unemployment rate through to the end of 2021, which will likely also help to support sectors such as housing and those reliant on discretionary spending. The plethora of tax freezes will also be a welcomed announcement for those expecting increases in their monthly tax bill and while corporations certainly won’t be happy footing the bill, they can at least breathe a sigh of relief that the rise won’t apply for another two years.
 
Sunak targets the economy in COVID-relief Budget
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