Here are some of the key points from the Chancellors Spring 2021 Budget, where Rishi Sunak announced plans to help the economy recover from the Coronavirus pandemic.
Bringing back 95% mortgages
The Government revealed a ‘Mortgage Guarantee’ scheme by encouraging lenders to offer mortgages for those who can only offer 5% deposits.
Low-deposit mortgages will resurface on the market from as early as next month. The nations big lenders such as HSBC, Natwest and Lloyds Banking has bid to offer low-deposit mortgages to boost house purchases in the economy.
Support to help businesses reopen
The Chancellor has revealed details of a £5bn grant scheme to help struggling High Street shops and hospitality firms in England reopen after lockdown.
The Chancellor said the grants would be worth as much as £18,000 per firm, with non-essential retail businesses opening first and receiving up to £6,000 per premises.
Nearly 700,000 shops, restaurants, hotels, hair salons, gyms and other businesses in England, will be eligible for the so-called “restart grants”, to be distributed directly to firms by local authorities from April. It will replace the current monthly grant system.
CBILS replaced by ‘Recovery Loan Scheme’
The Government has announced a new loan scheme to provide funding to businesses that have been affected by the Coronavirus pandemic. A new ‘Recovery Loan Scheme’ will seek to ensure businesses of any size can continue to access loans and other kinds of finance from £25,000 to £10 million.
Once drawn down, the finance can be used for any legitimate business purpose, including growth and investment. The government will again guarantee 80% of the finance to the lender – ensuring they continue to have the confidence to lend to businesses. The scheme launches on 6th April and is open until 31st December, subject to review.
Stamp Duty Extension
Rishi Sunak has announced an extension to the current freeze on stamp duty by three months, allowing deals on the brink of completion to not collapse.
Purchases up to £500,000 will continue to be free from the tax – and homes bought up to a value of £250,000 until the end of September.
Corporation tax will rise to 25% in 2023
Rishi Sunak stated in his budget that he will raise corporation tax to 25% in 2023. He also added that the UK will still have the lowest corporation tax in the G7.
The Chancellor announced a Small Profits Rate to ensure only businesses with profits of over £250,000 will be taxed at the 25% rate. Companies with profits of less than £50,000 will still pay 19%. Meaning that only 10% of all companies will pay the full higher rate.