At just after 12.30pm yesterday, Rishi Sunak, Chancellor of the Exchequer, announced financial packages, stimulus and support totalling over £400 billion for this year and next, in what Boris Johnson titled a ‘budget for recovery’.
To set the context, Rishi’s last budget script was torn up mere weeks after delivering it at the box after the Coronavirus pandemic gripped and strangled the nation. Since then, the Government has had to borrow over £270 billion and counting to fight the pandemic. The largest ever peacetime borrowing in history.
This was a far-reaching Budget from the Chancellor, ranging from counter-COVID-19 measures to the FIFA World Cup 2030 bid to creation of a new UK infrastructure bank and Freeports.
In immediate Covid-terms, he has thankfully lengthened furlough to the end of September, raising the National Living wage to £8.91 in April. The hospitality industry, which has been hit hardest, will receive a ‘Restart Grant’ of up to £18,000 per business.
For private clients, on the face of it, the Chancellor's freezing of personal tax thresholds will come as a relief to many, but really these are wolves in sheep's clothing, most will pay more tax, with higher earners hit the most. Rates of national insurance and VAT will remain the same, whilst the basic rate and higher rate bands will rise to £12,750 and £50,270, respectively, set until 2026. For prospective house buyers, the freeze on Stamp Duty has been extended until the end of June and there will be much more support for first-time buyers with a government guarantee on 95% mortgages up to £500,000.
For corporations, we will see the tax rate rise from 19% to 25% in 2023, but only for businesses with profits greater than £250,000. Sunak, however, stopped short of a digital tax, which has often been mooted by the press and politicians alike.
It wasn’t a free-for-all though. It was a shame that some sort of provision for the NHS and care homes weren’t mentioned, especially after all the work that their staff have gone above and beyond with over the past twelve months.
We very much believe this is a clear and concise budget, that will set the UK onto a strong and prosperous course to recovery and beyond. From this platform, the UK economy and stock market will bounce back.