London: Chancellor of Exchequer, Rishi Sunak, on Wednesday unveiled the budget for fiscal year 2021-22 while stressing on measures aimed at boosting post-Covid economy.
Sunak announced to hike departmental spending to record £150 billion over this parliament while terming it the biggest increase in the century. As part of this departmental spending, Sunak stated that as much as £5.9 billion has been allocated for the National Health Service with the aim to clear the backlog of people waiting for scans and tests. Likewise, the chancellor said an amount of £6.9 billion will be distributed to cities outside London for the purpose of improving public transport infrastructure.
Against the backdrop of inflation, the chancellor stated that the national living wage has been hiked to £9.50 from £8.91 with effect from April 1. Furthermore, the government has allocated £11.5 billion for building as much as 180,000 affordable homes over the period of next five years.
Sunak also announced plans to reduce Universal Credit Taper rate to 55p from existing 63p. Likewise, Universal Credit Work allowance has been hiked to £500 annually. Meanwhile, it has also been decided to freeze fuel duty amidst continuously rising international prices.
Other key highlights from the budget are as follow:
- As part of budgetary measures, the UK govt will subject flights between airports in the UK to a reduced Air Passenger Duty from April 2023.
- Howevere, the government will introduce a new long-haul air passenger duty from April 2023 on “over 5500 mills flights”.
- To mitigate the effects of the pandemic, the UK government has decided to extend financial support for airports for another 6 months.
- The UK government has decided to cancel a planned rise in duty on cider, wine, and spirits.
- The government has opted to reduce duty rates on lower alcohol drinks such as liqueurs, fruit ciders, rose wine, lower strength beers, and lower strength wines.
- The number of rates will drop to 6 from 15 through simplification of alcohol duties.
- The government has announced tax cuts on draught beer and sparkling wine.
- All sparkling wines will pay the same duty as still wines of equivalent strength.
Mr. Sunak stated that the government plans to increase public Research and Development Investment to £20 billion by 2024-25. Taking into account other R&D tax reliefs, the total support for R&D as a proportion of the UK’s gross domestic product (GDP) will reach a record 1.1% by 2024-25. It is pertinent here to mention that when reached the aforesaid levels, the R&D aid as a proportion to GDP will be well above than the OECD’s 2018 average of 0.7%.
Support to parents & families
Mr. Sunak stated the government will invest an additional £200 million in the Supporting Families Programme to provide financial support to as many as 300,000 more families facing multiple challenges. Likewise, the government will fund new early years programmes — such as parent-infant mental support and bespoke breastfeeding services — through £302 million spending.
Hospitality & Leisure Sectors
The Government will introduce what it termed “new temporary business rates relief” for eligible leisure, retail, and hospitality properties in England whereas the Business Rates Multiplier has been frozen for another year.
Offering a complete service to assist with your MTD requirements, IBISS & Co’s team of expert accountants and specialist tax advisers can help with every step of the operation – from a review of your existing systems to forming new compliance-related strategies. We will keep you apprised of all the latest HMRC updates and ensure minimal business disruption. Contact us today to learn how to make your MTD transition a successful and smooth process.