When I was younger, you never could have convinced me that the words ‘highlights’ and ‘UK budget’ would ever be used in the same sentence.
In the past, the budget announcements have been terribly boring affairs. For the most part, the big macro economic announcements would have little effect on my day-to-day life.
This year, things are slightly different. Because of the ongoing trail of wreckage left by the coronavirus as it continues to rip through the fabric of society, this year’s budget was an important one.
So let’s take a look at some of the recent announcements that actually matter.
Continuation of the Universal Credit £20 uplift
I find it pretty amazing that this wasn’t a certainty to begin with. It’s appalling that in a country as wealthy as Britain, there’s such opposition to giving the poorest in our country an extra twenty quid a week.
I’ve been on universal credit in the past and I can tell you now, the privileged cries of ‘welfare state’ are so misinformed. I would love to see a countrywide initiation where everyone had to spend a month living off seventy pounds a week.
It would have been devastating if the temporary uplift wasn’t continued to support the people out there who need it and currently have few opportunities to work or earn more money. I’m surprised the Conservative Party did something decent, but then again this is the bare minimum that should be done to support individuals.
Corporation tax increase to 25%
This is long overdue. Corporation tax is only on profits and not on revenue. Not every business has suffered due to the virus and so it’s a fair shout that those who have prospered amongst the misery pay a bigger share to help towards national recovery.
The current rate of corporate tax in the UK is 19%, which is a lot lower than most developed countries. This rate rise from 19% to 25% won’t be taking place until April 2023. Furthermore, there will still be a ‘small profit rate’ of 19% for businesses who make less than £50,000 profit in 2023.
Furlough scheme extended
Support for furloughed workers is being extended until September.
This is good news because it’s well past the point of lockdowns being over and hopefully a vaccine rollout.
An extension to this scheme is just going to help provide an extra layer of security and support to workers. I’m glad it’s been extended but again, this is the bare minimum that should be being done to support workers and businesses with employees.
Stamp duty holiday and guaranteed mortgages
The housing market is a complicated one. Lots of people have moved back in with parents in order to save and ride out the uncertainty.
In order to boost demand for housing and provide continued liquidity, there will be no stamp duty tax due on any property purchase up to £500,000. Up until 30th June after which the nil-rate band will drop down to £250,000 until the end of September.
To lower the barrier to entry for people hopping onto the property ladder, the government is going to guarantee the mortgages for anyone who can only afford a 5% home deposit. This should hopefully provide lenders more security and make them more willing to dish out a mortgage to people on lower incomes.
I know this isn’t an extremely exciting topic to cover, but it’s an important one.
Along with all the changes, what’s perhaps more important is what wasn’t changed. There’s been no increase to income taxes, pensions, or capital gains tax. This is great for savers and investors.
Rules for stocks and shares ISAs are staying the same and there’s no punch to the gut of individual investors, phew! No change to cryptocurrency taxing is also a sigh of relief for all hodlers out there!