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Britain will be paying the bill for Covid for decades to come after Rishi Sunak’s Budget set the nation on track for the highest tax burden in more than 50 years to pay for total spending of £407bn on pandemic support.

The chancellor announced a further £65bn lifeline for firms and workers, extending furlough, business rate relief and VAT breaks. The £20-a-week universal credit uplift has also been extended for another six months.


But he reversed 10 years of tax-cutting Conservative policy on corporation tax by announcing a hike from 19 to 25 per cent, to be introduced in 2023. And he froze income tax personal allowance thresholds until 2026, dragging 1.3 million low-paid people into paying it as their earnings increase.

The Institute for Fiscal Studies described it as the biggest tax-raising budget since 1993, increasing the state’s net take by £29bn in 2025-26


Source: https://www.independent.co.uk/news/uk/politics/budget/rishi-sunak-budget-coronavirus-tax-b1812062.html


Published in Accounting

With lives and livelihoods still at risk, Chancellor Rishi Sunak's Budget is focused on short-term support for people's jobs and finances.

But there are signs of what will happen next and how this will affect the money in your pocket.

1. Paying the wages of those on furlough

Although it was announced in advance, like many other key measures, the extension of furlough is significant for millions of people.

The scheme - which pays 80% of employees' wages for the hours they cannot work in the pandemic - has been extended until September.

Young and lower-paid people have been among the most likely to have been furloughed during the pandemic.

While this is designed to protect their jobs from redundancy, many will have found that their income has been a fifth less than they had anticipated over the course of 18 months.

The National Living Wage will rise to £8.91 from April, from £8.72. That is a 2.2% rise and will be for people aged 23 and over.

2. Jabs, then jobs

Money promised for the vaccine rollout does not directly affect the amount of money that goes into the pockets of individuals.

But the extra £1.65bn to help vaccinate every adult by the end of July should mean people can get back to work and the economy can start to recover.

Quicker jabs mean more jobs protected, which means that incomes can recover or be maintained.

3. Support for the self-employed

Furlough supports employed people. The equivalent for the self-employed comes in the form of grants through the Coronavirus Self-Employed Income Support Scheme (SEISS).

From next month, claims can be made for a fourth grant worth 80% of three months' average trading profits, up to £7,500 in total.

This will then be followed by a fifth grant later in the year, covering May to September.

However, the amount paid will depend on the amount of turnover lost. People whose turnover has fallen by less than 30% will receive a grant that is equivalent to 30% of average trading profits.

While many self-employed people remain ineligible - the source of considerable debate - those who can show they were trading in 2019-20 from their tax returns will now be eligible for the first time. They can receive the fourth and fifth grants.


Source: https://www.bbc.co.uk/news/business-56263581


Published in Accounting