Coronavirus support and economic recovery were at the centre of Chancellor Rishi Sunak's budget, with current support extended, and new funding announced to help businesses as they re-open when restrictions begin to ease.
The Government has already announced £280billion in Coronavirus support over the last year, pledging to do all it could to protect jobs and businesses. With the economic impact of Coronavirus expected to be felt for a little while longer, the Chancellor's budget continued generous funding to help businesses re-open and recover.
To protect the jobs and livelihoods of the British people through the remaining phase of this crisis, the furlough scheme is being extended until the end of September. Employees will continue to receive 80% of their current salary for hours not worked. There will be no employer contributions beyond NICs and pensions required in May and June, and from July the Government will introduce an employer contribution towards the cost of unworked hours.
The Self-Employed Income Support Scheme will also be extended with a 4th and 5th round of grants. A grant covering the period February to April will be worth 80% of average trading profits, and a fifth grant will target support towards those most affected by the pandemic. As the tax return deadline has now passed, the chancellor announced that more than 600,000 people who became self-employed last year can now claim the 4th and 5th grants.
As the Bounce Back Loan and CBIL schemes come to an end, the Chancellor is introducing a new Recovery Loan Scheme to take their place. Businesses of any size can apply for loans from £25,000 up to £10million, through to the end of the year. The Government will continue to stand behind these Recovery Loans, providing lenders with an 80% guarantee.
To ensure that businesses can hit the ground running, the Government is offering Restart Grants, which will be available to help businesses as they re-open. Non-essential retail businesses will open first, so they will receive grants of up to £6,000. Hospitality and leisure businesses, including personal care and gyms, will open later and be under more restrictions, so they will be eligible for grants of up to £18,000. All local English Authorities will also be given £425million of discretionary business grant funding on top of the £1.6billion already allocated. Furthermore, firms in the tourism and hospitality sectors will continue to benefit from a 5% VAT rate.
To help businesses grow and recover, the Help to Grow: Management scheme will allow thousands of SMEs to get world-class management training. Business schools across the country will offer new MBA style management training with 50 hours of quality tuition, mentoring and peer learning. Businesses will have to pay just £750, 10% of the unit cost. Help to Grow: Digital will help SMEs develop digital skills with free expert training and a 50% discount on new productivity-enhancing software.
To tackle fraud relating to COVID schemes, a new £100million Taxpayer Protection Taskforce will be set up, comprising of around 1,000 investigators who will investigate people who have fraudulently claimed tax payer's money as part of the Government’s COVID support.
The Government also continued its ambition to level up across the Country with the announcement of 45 new Town Deals – one of which has been awarded to Swindon, which will receive £19.5million. The funding will sustain jobs in Swindon, improve connectivity and boost economic growth at this crucial time for the town.
To support for the lowest paid and most vulnerable, the temporary £20 uplift to Universal Credit will continue for a further six months. Due to the way the system works operationally, we need to give Working Tax Credits claimants their equivalent of 6 months of support through a one-off payment of £500. We’re also increasing the National Living Wage to £8.91 from April, and extending it to people over 23 – worth almost a £350 pay rise.
The Chancellor has frozen income tax thresholds until 2026. As part of the Corporation Tax arrangements announced by the Chancellor, the UK remains the lowest corporation tax rate among the G7 countries. Furthermore, the chancellor has announced a smaller profits rate on firms with profits under £50,000 in the UK, who will still enjoy a 19% corporate tax rate.
Among the good news for homebuyers were that the Government has unveiled a new mortgage scheme to assist new buyers, including incentives to lenders to offer more 95% mortgages. Additionally a 3 months extension to the stamp duty holiday for properties valued under £500,000 has been announced.
In the Budget, the Chancellor also froze all current duties on fuel and alcohol, which will come as an important boost to consumers and the sectors they represent.
In his speech, the Chancellor also announced the Green Savings Bond, which is the first of its kind in the UK and will be used to spearhead investment in green and renewable energy sectors, such as offshore wind, solar power and tidal energy.
The Spring Budget will also see a £300m package introduced that will benefit outdoor/Summer Sports. After more than a year without spectators, this added funding will come as welcome news to clubs and supporters in the UK, as matches and events begin to take place in accordance with the scaling back of Covid-19 restrictions.
£400million is also being made available towards the arts, in funding for; galleries, music venues, theatres and more to help mitigate the additional costs of social distancing. Additionally, he announced a fund of £150 to help communities take ownership of struggling pubs, clubs and music venues.
The Chancellor Announced his ambition for the UK to be a leading scientific superpower, in which he reaffirmed the Governments financial support for growing scientific schemes in the UK, as well as reducing the level of bureaucracy on high level visas for scientists from overseas. He also confirmed a further £1.6BN towards the already successful vaccine rollout in the UK.
