Key Points you Should Know about authumn Budget 2021

The contents of Chancellor Rishi Sunak’s Budget have been revealed in the House of Commons.

Mr Sunak, in outlining the Government’s tax and spending plans for the coming year, stated that his plans were centred on the “post-Covid” era and that they would pave the way for an “economy of higher wages, higher skills, and rising productivity.”

below are the excerpts of Rishi Sunak’s speech from the Budget 2021 announcement:

The state of the economy and the state of the public finances

• Inflation was 3.1% in September and is expected to average 4% next year, according to the OBR, with the UK economy expected to return to pre-Covid levels by 2022.
• Annual growth is expected to increase by 6.5% this year, then by 6% in 2022.
• Unemployment is expected to increase at 5.2% next year, down from the previous prediction of 11.9%.
• Wages have increased by 3.4% in real terms since February 2020.
• Borrowing as a percentage of GDP is expected to fall from 7.9% to 3.3% the following year.
• Borrowing as a percentage of GDP will then fall to 1.5% over the next four years.
• By 2024-25, foreign aid spending is expected to return to 0.7% of GDP.

Wages and Taxation Policies:

• The Universal Credit taper rate will be lowered by 8% no later than December 1, lowering it from 63% to 55% and allowing claimants to keep more of the payment.
• Confirmation business rates will be kept and reformed.
• In England, the retail, hospitality, and leisure sectors will receive a 50% business rate discount in 2022-23, up to a maximum of £110,000.
• A planned increase in fuel duty will be cancelled amid the highest pump prices in eight years.
• Consultation on a sales tax on the internet
• The National Living Wage will rise by 6.6% to £9.50 per hour next year.

Government Expenses:

• Whitehall departments will see an increase in overall spending of £150 billion throughout this Parliament.
• The Scottish Government’s funding will increase by an average of £4.6 billion, the Welsh Government’s budget will increase by £2.5 billion, and Northern Ireland’s funding will increase by £1.6 billion. The Executive Levelling Up Fund will invest £1.7 billion in local communities across the UK.
• Aberdeen, Bury, Burnley, Lewes, Clwyd South, Stoke-on-Trent, Ashton under Lyne, Doncaster, South Leicester, Sunderland, and West Leeds are receiving government funding.
• An additional £2.2 billion for courts, prisons, and probation services, including funding to clear the court backlog

Education Department:

• By 2024-25, schools will receive an additional £4.7 billion.
• Nearly £2 billion in new funding will be made available to assist schools and colleges in recovering from the pandemic.
• Schools’ funding will be restored to 2010 levels in real terms, representing a cash increase of more than £1,500 per pupil.
• A total of £300 million will be spent on “Start for Life” parenting programmes, with an additional £170 million promised childcare by 2024-25.
• A UK-wide numeracy programme will be established to assist adults in improving their basic math skills.

Air, Alcohol and Housing:

• Flights between UK airports will be subject to a new lower rate of Air Passenger Duty beginning in April 2023.
• Alcohol duty rates will be reduced from 15 to six. Lowering the duty on draught beer and cider from containers larger than 40 litres results in a 5% decrease in the rate.
• Housing funding totals £24 billion, including £11.5 billion for up to 180,000 affordable homes on brownfield sites.

These are the key highlights announced by Chancellor Rishi Sunak in Budget 2021. FinConcile is UK-based outsourcing.

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