Yesterday (Wednesday 3 March) the Chancellor of the Exchequer, Rishi Sunak MP, set out the budget for this year.
The Budget focused on how the government will extend its economic support to reflect the cautious easing of social distancing rules and the reopening of the economy in the government’s roadmap.
Below is a round-up of the key announcements that affect Postmasters and retailers as part of this Budget.
- Business rates holiday to continue to the end of June. Business rates will be discounted for the rest of the year by 66%.
- 5% reduced rate of VAT to continue for hospitality, leisure and tourism, with an interim increase to 12.5% in October and then back to standard by April 2022.
- Furlough to extend with no changes to employees. Businesses will have to start contributing 10% in July and 20% in August and September.
- Fourth grant for self-employed workers, with a fifth grant from May. People whose turnover his reduced by 30% or more will continue to receive 80% of average income. Those with less than 30% loss of revenue will only be able to claim 30%. Newly self-employed people who submitted their tax return for the last tax year will also be able to benefit from support.
- Universal Credit boost will continue for the next six months and further tax credits will continue.
- National Living wage to increase to £8.91 from April.
- Business support payments for all apprentices doubled to £3000 for new hires.
Taxes & duties
- Freezing personal tax threshold to £12,570 next year. 40% tax band will increase to £50,270 and will stay there along with the tax-free allowance until April 2026.
- No increases to National Insurance or income taxes.
- In 2023, corporation tax paid on company profits will increase to 25%. This is still the lowest in the G7
- The new higher rate will take effect once the OBR economic forecast the economy will recover. Small businesses with small profits will be kept at 19%.
- When companies invest, companies can reduce their tax bill by 130%. This “super deduction” is a new policy for the UK and touted by the OBR to significantly boost recovery.
- Freeze to alcohol and fuel duties.
You can read the full 2021 Budget here.