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UK Budget 2021: Five key takeaways

We break down the key points for spa businesses from Chancellor Rishi Sunak's second Budget

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Delivering his Budget to the UK House of Commons in London today (Weds, Mar 3), Chancellor Rishi Sunak confirmed that he would do “whatever it takes” to support both people and businesses through this “moment of crisis”.

A £65bn three-point plan details that corporation tax will increase to 25% from 2023 but income tax thresholds will freeze.

As the UK emerges from lockdown, the Chancellor’s immediate priority will be to support “those hardest hit” with extensions to furlough; self-employed support; business grants; loans and VAT cuts. This will bring total fiscal support to more than £407bn.

The UK economy is forecast to return to pre-Covid levels by mid-2022 and the UK is to borrow a peacetime record of £355bn this year.

Key points of interest from the Budget

  • 1. VAT cut for hospitality and tourism businesses to be maintained and extended

The VAT cut will remain at 5% until September 2021, with an interim 12.5% rate to apply for the following six months until  March 31, 2022. Around 750,000 eligible businesses in retail, hospitality and leisure sectors will also benefit from business rates relief.

 

  • 2. Furlough will be extended until the end of September 2021

The scheme, which pays 80% of employees’ wages for the hours they cannot work during the coronavirus pandemic, will ask employers to contribute 10% in July and 20% in August and September.

 

  • 3. £5 billion for restart grants 

A one-off cash grant of up to £18,000 will be available for hospitality, leisure, personal care, accommodation and gym businesses in England.

 

  • 4. Government widens self-employed grants access

Around 600,000 more self-employed people (who filed a tax return in 2019-20) will now be eligible for government help for the first time.

 

  • 5. Support for the whole UK

The Budget provides an additional £2.4bn to the devolved administrations in 2021-22 through the Barnett formula.

  • The Scottish Government will receive £1.2bn
  • The Welsh Government will receive £740m
  • The Northern Ireland Executive will receive £410m

 

Be informed...

To read the full Budget report, click below

2021 Budget
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