Budget 2021 - What you need to know
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Published: 3 March 2021
- An extra £1.65 billion cash injection to ensure the
Covid-19 vaccination roll-out in England continues to be a success.
- £28 million to increase the UK’s capacity for vaccine
testing, support for clinical trials and improve the UK’s ability
to rapidly acquire samples of new variants of COVID-19.
- £22 million for a world-leading study to test the
effectiveness of combinations of different Covid-19 vaccines. This will
also fund the world’s first study assessing the effectiveness of
a third dose of vaccine to improve the response against current and
future variants of COVID-19.
- A further £5 million on top of a previous £9 million
investment in clinical-scale mRNA manufacturing, to create a
‘library’ of vaccines that will work against Covid-19
variants for possible rapid response deployment.
- Extending £500 Test and Trace support payments in England
until the summer.
2. Protecting jobs and
3. Strengthening the public
- Maintaining the income tax Personal Allowance and higher rate
threshold from April 2022 until April 2026.
- To balance the need to raise revenue with the objective of having
an internationally competitive tax system, the rate of Corporation Tax
will increase to 25%, which will remain the lowest rate in the G7. In
order to support the recovery, the increase will not take effect until
2023. Businesses with profits of £50,000 or less, around 70% of
actively trading companies, will continue to be taxed at 19% and a
taper above £50,000 will be introduced so that only businesses
with profits greater than £250,000 will be taxed at the full 25%
- Maintaining inheritance tax thresholds at their current levels
until April 2026.
- Fuel duty will be frozen for the 11th consecutive year.
- Alcohol duties will be frozen across the board for the second
year running saving drinkers £1.7 billion.
- Capping the amount of SME payable R&D tax credit that a
business can receive in any one year at £20,000 (plus three times
the company’s total PAYE and NICs liability).
- Maintaining the Lifetime Allowance at its current level of
£1,073,100 until April 2026.
- The adult ISA annual subscription limit for 2021-22 will remain
unchanged at £20,000.
4. An investment-led recovery
- Beginning April 2021, the new super-deduction will cut
companies’ tax bill by 25p for every pound they invest in new
equipment. This is worth around £25 billion to UK companies over
the two-year period the super-deduction will be in full effect.
- Eight new English Freeports will be based in East Midlands
Airport, Felixstowe & Harwich, Humber, Liverpool City Region,
Plymouth, Solent, Thames and Teesside.
- The £375 million UK-wide ‘Future Fund:
Breakthrough’ will invest in highly innovative companies such as
those working in life sciences, quantum computing, or clean tech, that
are aiming to raise at least £20 million of funding.
- Reforms to the immigration system will help ambitious UK
businesses attract the brightest and best international talent.
- A new Help to Grow scheme to offer up to 130,000 companies across
the UK a digital and management boost.
- £2.8 million to support a UK and Ireland bid to host the
2030 World Cup and £25 million investment in UK grassroots
sports, enough for around 700 new pitches.
- Launching a review of Research & Development tax reliefs to
make sure the UK remains a competitive location for cutting-edge
- £20 million to fund a UK-wide competition to develop
floating offshore wind demonstrators and help support the
government’s aim to generate enough electricity from offshore
wind to power every home by 2030.
- £68 million to fund a UK-wide competition to deliver
first-of-a-kind long-duration energy storage prototypes that will
reduce the cost of net zero by storing excess low carbon energy over
- £4 million for a biomass feedstocks programme in the UK to
identify ways to increase the production of green energy crops and
forest products that can be used for energy.
- Publication of the the government’s ‘Build Back
Better: our plan for growth’.
- Over £1 billion funding for a further 45 towns in England
through the Towns Fund, supporting their long-term economic and social
regeneration as well as their immediate recovery from the impacts of
- £135 million to progress A66 Trans-Pennine upgrade.
- £28 million to fund the Queen’s Platinum Jubilee
celebrations in 2022, delivering a major celebration for the UK.
- Plans for at least £15 billion of green gilt issuance in
the coming financial year, to help finance critical projects to tackle
climate change and other environmental challenges, fund important
infrastructure investment, and create green jobs across the UK.
- £150 million Community Ownership Fund will allow
communities across the UK to invest to protect the assets that matter
most to them such as pubs, theatres, shops, or local sports clubs.
- £18.8 million to transform local cultural projects in
Hartlepool, Carlisle, Wakefield and Yeovil.
- Publication of the prospectus for the £4.8 billion UK-wide
Levelling Up Fund, providing guidance for local areas on how to submit
bids for the first round of funding starting in 21-22.
5. Scotland, Wales and
- Individuals and businesses in Scotland, Wales and Northern
Ireland continue to be supported by the UK Government through the
Coronavirus Job Retention Scheme, self-employment grants, loan schemes
and VAT cuts. Devolved administrations have received Barnett funding to
provide support in areas of devolved responsibility.
- The Budget confirms an additional £2.4 billion for the
devolved administrations for 2021-22 through the Barnett formula. This
is an additional £1.2 billion for the Scottish Government,
£740 million for the Welsh Government, £410 million for the
Northern Ireland Executive.
- The devolved administrations will also receive £1.4 billion
of funding in 2021-22 outside the Barnett formula.
- £27 million in the Aberdeen Energy Transition Zone and
£5 million in the Global Underwater Hub in Scotland, the first
stage in delivering the North Sea Transition Deal.
- Three Growth Deals in Scotland – Ayrshire, Argyll &
Bute, and Falkirk – will receive funding more quickly.
- £4.8 million to support the development of a demonstration
hydrogen hub in Holyhead, Anglesey.
- Up to £30 million for the Global Centre for Rail Excellence
- Three City and Growth Deals – in North-Wales, Mid-Wales and
Swansea Bay – will receive funding more quickly.
- Northern Ireland will benefit from the Corporation Tax exemption
for the Northern Ireland Housing Executive, Northern Ireland’s
- Almost half of the £400 million New Deal for Northern
Ireland funding has been allocated, subject to business cases, to: new
systems for supermarkets and small traders to manage new trading
arrangements; building greater resilience in medicine supply chains;
promoting Northern Ireland’s goods and services overseas; and
supporting skills development.
- £5 million to extend the Tackling Paramilitary Programme in
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Article Published/Sorted/Amended on Scopulus 2021-03-03 23:59:59 in Tax Articles