The March 2021 United Kingdom budget, officially known as Protecting the Jobs and Livelihoods of the British People was a budget delivered by Rishi Sunak, the Chancellor of the Exchequer in March 2021. It was expected to be delivered in autumn 2020, but was postponed because of the COVID-19 pandemic. It succeeds the budget held in March 2020, and the summer statement and Winter Economy Plan held in summer and autumn 2020, respectively. The budget is the second under Boris Johnson's government, also the second to be delivered by Sunak and the second since Britain's withdrawal from the European Union. The budget was the first for government expenditure in the United Kingdom to exceed £1 trillion.
It was confirmed on the previous day that the Coronavirus Job Retention Scheme and the Self Employment Income Support Scheme had been extended to 30 September 2021.
Key measures
In his budget speech, Rishi Sunak emphasized the effect the COVID-19 pandemic has had on the economy, with 700,000 people losing their jobs, the economy shrinking by 10% (the largest fall in 300 years), and the highest borrowing outside wartime. It is expected that unemployment will peak at 6.5% (an improvement on the previous estimate of 11.9%) and that the budget deficit will reach £355 billion in 2021, or 17% of GDP, the highest level in peacetime.
Measures in the budget include:
COVID-19
Extension of the Coronavirus Job Retention Scheme and Self Employment Income Support Scheme until the end of September £1.65 billion injection into the COVID-19 vaccine roll-out in England £28 million to increase the UK's capacity for vaccine testing, clinical trials and improve the UK's ability to acquire samples of new variants of SARS-CoV-2 £22 million to test the effectiveness of combinations of different COVID-19 vaccines An extra £5 million investment in clinical-scale mRNA manufacturing Extending £500 NHS Test and Trace support payments in England until the summer Total COVID-19 support package for 2021–22 is £352 billion
Taxation
No changes to rates of income tax, national insurance contributions, or value-added tax Tax-free personal allowance frozen at £12,570 for five years from 6 April 2021 Higher rate income tax threshold frozen at £50,270 for five years from 6 April 2021 Corporation tax on company profits above £250,000 to rise from 19% to 25% in April 2023 Rate to be kept at 19% for smaller companies with profits of less than £50,000 Stamp Duty holiday on house purchases in England and Northern Ireland extended to 30 June 2021 for purchases up to £500,000 and to 30 September for prices up to £125,000 Inheritance tax thresholds, pensions life time allowances and annual capital gains tax exemptions to be frozen at 2020–2021 levels until 2025–26 It is expected that the measures will cause borrowing to fall to 4.5% of GDP in 2022–23, 3.5% in 2023–24, 2.9% in 2024–2025, and 2.8% in 2025–2026. The national debt is expected to rise from 88.8% of GDP in 2021 to 93.8% in 2022, 97.1% in 2023–24, 97% in 2024–2025 and 96.8% in 2025–2026 The Office for Budget Responsibility has estimated a budget deficit of £394 billion in 2020–21
Business, digital and science
Tax breaks for firms to "unlock" £20 billion worth of business investment
Firms can deduct investment costs from tax bills, reducing taxable profits by 130% Incentives for firms to take on apprentices to rise to £3,000, and £126 million for traineeships Lower VAT rate for hospitality firms maintained at 5% until September, and an interim 12.5% rate will then apply for the following six months Business rates holiday for firms in England to continue until June, followed by a 75% discount £5 billion in Restart grants for shops and other businesses in England forced to close £6,000 per premises for non-essential outlets due to re-open in April and £18,000 for gyms, personal care providers and other hospitality and leisure businesses Visa scheme to help start-ups and rapidly growing tech firms source overseas Contactless payment limit to rise to £100 from 15 October 2021 All alcohol duties to be frozen; no extra tax on spirits, wine, cider or beer Fuel duty to be frozen for eleventh consecutive year Tobacco duties to rise by inflation plus 2%
Health
£19 million for domestic violence programmes and funding network of respite rooms for homeless women £40 million funding for victims of 1960s Thalidomide scandal and lifetime support guarantee £10 million to support armed forces veterans with mental health needs Details released after the speech confirmed allocation of a further £15bn to NHS Test and Trace for 2021–22