Budget 2021: Business boosts and taper cuts

Chancellor of the Exchequer, Rishi Sunak MP addressed the House of Commons with the updated Autumn 2021 budgets today, covering a vast swathe of topics in order to assure the British economy would be put back on track, to mixed responses.

Firstly, the chancellor addressed what measures would be taken in order to reduce the “driver shortage” the UK is experiencing for heavy goods vehicles. This included the introduction of temporary visas and “increased funding for lorry park facilities.”

Rishi Sunak MP also added that economic growth is set to grow between 4.6 and 6 per cent by the turn of the year, and 7.3 per cent next year. Resultantly, “2 million people” will be pulled “out of unemployment.” Unemployment is ultimately set to drop from 12 per cent to 5.2 per cent with new measures being introduced.

In respect of the government’s treatment of the ongoing effects of the Covid-19 pandemic, several measures have been announced. For example, the government has pledged to continue paying 80 per cent of furloughed employees’ wages. However, employers must now contribute 10 per cent of this as of July 2022, increasing to 20 per cent in August 2022.

The taxation rate is to be kept at 19% for approximately 1.5 million smaller companies with profits of less than £50,000. On top of that, retail, entertainment, and hospitality sector businesses will be able to claim up to 50 per cent of spending back up to an arranged value of £110,000.

Perhaps the most significant announcement in respect of the average UK citizen among the budget is that the universal credit taper is now set to be cut from 63 per cent to 55 per cent to ensure “work pays” without what Rishi Sunak MP refers to as a “secret tax”.

The taper rate cut will be made “no later than December 1”, and will allow the average UK household to supposedly retain an additional £1,000 annually.

Housing and home ownership were also topics of focus at the announcement, with the sector to receive £24bn of investment. This is 24 per cent larger than the government’s previous programme. Rough sleeping and homelessness are also set to see 85 per cent of additional funding.

Finally, the rate of air passenger duty to be cut by April 2023 for domestic UK flights, providing a “boost to regional airports”. This announcement has been considered particularly unique, as this cut in cost is the first of its kind since 2001.