Budget response from Dutton Moore…
3 March 2021

Responding to today’s budget from Chancellor Rishi Sunak, Managing Partner Tony Bullock is impressed with the innovative and fair announcements made across the board.

In summary he commented: “The forecast for growth from the Bank of England and OBR is positive given we remain with lockdown restrictions. The economy is expected to return to pre-COVID levels by the middle of next year, six months earlier than previously thought with growth of 4%, moving to 7% in 2022 and 1.8% in 2023.

“Generally, the budget is pumped full of incentives and packages that allow the economy to bounce back, keep people in their jobs and provide support for businesses into the autumn as the mass vaccination scheme continues enabling restrictions to be lifted and our freedoms to return.

“For this region I am particularly pleased to see the investment into off-shore wind farms and the announcement that the Humber will be one of the designated Free Ports, enabling a special economic zone to make it cheaper and easier to do business.”

Key announcements at a glance:

• £1.6bn will go towards continuing the vaccine rollout.
• Furlough scheme will be extended until the end of September.
• Help for the self-employed will also be extended with changes meaning 600,000 more people will be eligible.
• Business rates holiday for retail, hospitality and leisure sector firms has been extended to the end of June and for the remaining nine months of the fiscal year they will still be discounted by up to two-thirds.
• Reduced rate of 5% VAT for the hospitality and tourism sectors has been extended to the end of September, and will only go up to 12.5% after that, before returning to 20% next April
• £5bn of new grants for hard-hit firms - worth up to £6,000 for non-essential retailers and £18,000 for restaurants, pubs, personal care and gym businesses which will reopen later.
• Freeze on alcohol and fuel duty.
• Bounce-back and other coronavirus loans for businesses will be replaced by a new recovery loan scheme, 80% guaranteed by the government.
• Companies will be able to offset losses against their tax bills going back up to three years, allowing them to claim additional refunds of up to £760,000
• Incentive payments for new apprentices are being doubled to £3,000 while £126m will be invested to triple the number of new traineeships.
• A "help to grow" scheme will offer smaller businesses management and digital training
• Personal income tax thresholds will be frozen from next year until 2026.
• Thresholds for inheritance tax, pensions lifetime allowance and capital gains tax thresholds are also being frozen.
• Corporation tax is to increase to 25% in April 2023 - still the lowest rate in the G7.
• However, 70% of companies - with profits of £50,000 or less - will still only be liable for the current 19% rate.
• Stamp duty holiday extended.
• The government will guarantee 95% mortgages to help those who can only afford a 5% deposit.
• A "super-deduction" to incentivise business investment will mean they can reduce their taxable income by 130% of the amount they invest.
• The first ever UK Infrastructure Bank will be set up, in Leeds, with an initial capitalisation of £12bn - to finance public and private sector "green industrial revolution" projects
• Eight freeports - special economic zones to make it cheaper and easier to do businesses – this includes the Humber region.
• Visa reforms to make it easier to attract the best international talent" in science, research and technology.
• £700m will go on supporting arts, culture and sports as they reopen.
• An extra £19m for domestic violence programmes and £10m to support veterans mental health needs.
• Contactless payment limit increased to £100.

Disclaimer: these proposals may alter or be different when legislation comes out.

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