The Government will pay the wages of furloughed workers until the end of September in an extension of the job retention scheme which has helped to keep more than 11 million people in work since the crisis started. Workers will still get 80pc of their wages until the scheme comes to an end.
Almost 600,000 “newly self-employed” which have so far been left out of income support will be included in the fourth round of grants for struggling freelancers, worth up to £7,500. They were previously excluded as they had never filed tax returns when the pandemic started, but the Government is now able to confirm their status. There will also be a fifth grant available from May to cover lost incomes until September for those still in need.
The stamp duty holiday is extended until the end of June, giving those with transactions in the pipeline the chance to make a tax saving of up to £15,000 on properties worth up to £500,000. The threshold will then fall to £250,000 until the end of September, after which it will revert to its original level.
There will be a new scheme offering first-time buyers 95pc mortgages with Government guarantees, to turn “generation rent into generation buy” as the Help to Buy scheme is wound down.
Employers will be able to use the furlough scheme to keep staff on the payroll until the end of summer. They will have to start paying 10pc towards their employees’ furlough pay from July and then 20pc from August.
A new “restart grants scheme” for businesses will provide £5bn in handouts ranging from £6,000 to £18,000 for affected business. Business interruption and bounce back loans will be replaced with new state-backed “recovery loans” of £25,000 up to £10m. The temporary 5pc VAT rate for businesses hit hardest will be extended for another six months and the business rate holiday will last until the end of June.
The £20 a week uplift in Universal Credit that came in when the crisis started will stay in place for a further six months. The National Living Wage will rise to £8.91 – equivalent to an extra £350 a year for a full-time worker.
Retail savers will be able to earn interest in new sovereign green bonds aimed at aiding the recovery.
Planned increases in tax on alcohol will be scrapped for a second year in a row.
Fuel duty will also not go up, as planned.
Income tax payers
The amount you can earn tax free, known as the personal allowance, will rise but future increases have been canned.
It will go up to £12,570 from April, along with the higher-rate threshold to £50,270 – but will then stay frozen until at least April 2026.
The amount you can save into a pension pot over your lifetime was also due to go up, by £5,800, but will now stay capped at £1.07m. The move is expected to raise £250m a year by 2024.
The inheritance tax threshold will also stay frozen at £325,000 per person. It has not changed since 2009, meaning more pay as house prices and wealth levels rise.
The £12,300 tax allowance for profits from investments, including second home sales, will also stay the same.
Businesses will be hit with higher corporation taxes. Britain’s 19pc rate is one of the lowest in the G7. This will go up to 25pc from 2023. Smaller businesses with profits under £50,000 a year will be protected from the rate increase and a taper system will ensure only the firms making the biggest profit above £250,000 pay the new top rate.
The Chancellor promised a £100m fund to help tackle state handouts lost to fraudsters abusing the furlough scheme and other benefit programmes.
Directors of limited companies still do not qualify for the self-employed income support scheme, even though many are de facto freelancers with no employees. This is despite Northern Ireland setting up a targeted scheme to help its own company directors.
Published online on 3rd March 2021 at www.telegraph.co.uk By Harry Brennan