Budget Update March 2021

Chancellor Rishi Sunak delivered his Budget statement to parliament this afternoon, setting out how the country will recover from the Coronavirus pandemic.

Here are the key points:-

* Minimum wage to increase to £8.91 an hour from April 2021
* Income tax thresholds will freeze as well as National Insurance and VAT
* The Furlough Scheme – which pays 80% of employees’ wages – will be extended until the end of September but employers will be asked to contribute 10% in July and 20% in August and September
* Corporation tax will increase to 25% from 2023
* 5% reduced rate of VAT for tourism and hospitality will be extended for six months to the end of September 2021
* The 100% business rates holiday in England will continue from April until June 2021
* Unemployment may peak at 6.5% in 2022, lower than the 11.9% predicted

The Office of Budget Responsibility is now forecasting a “swifter and more sustained recovery than expected” and predicts the economy will return to pre-pandemic levels by the middle of 2022, six months earlier than it predicted in November.

It also forecasts that over the next five years the economy will be 3% smaller than it would have been.