Rishi Sunak has announced a coronavirus support package worth more than £400 billion as he revealed spending packages to help people and strengthen public finances.
As part of the Chancellor’s three-point plan to protect jobs and strengthen public finances Mr Sunak announced billions in funding for an extension of furlough, business grants, loans and VAT cuts.
Mr Sunak said the measures to support the economy amounted to £65 billion over this year and next, taking the total Government support to £407 billion over that period.
The furlough scheme will be extended to the end of September, as will support for the self-employed. The scheme was due to end in April this year, having previously been extended in December 2020 after the Government announced it would continue to contribute 80 percent towards wages. This comes despite data showing that efforts to counter the pandemic are exceeding expectations. It also means employers will be able to keep staff on the payroll through the scheme until the end of summer. From July they will have to start paying 10 percent towards their employees' furlough pay, which will rise to 20 percent from August. Those self employed who had been left out of previous support because they had never filed tax returns will now be recognised in the fourth round of grants, worth upto £7,500.
The Universal Credit uplift of £20 a week will continue for a further six months, well beyond the end of this national lockdown. The Telegraph previously revealed this would be happening after the Prime Minister, Chancellor and Work and Pensions Secretary arrived at an agreement on the issue following tense negotiations and pressure from backbenchers for a lengthier commitment. The National Living Wage will rise to £8.91 – equivalent to an extra £350 a year for a full-time worker.
A new restart grant will start next month to help businesses reopen, with £5 billion of funding.
The business rates holiday for the retail, hospitality and leisure sectors will continue until the end of June, and will be discounted by two thirds for the remaining nine months of the year. Earlier this month Scotland extended its business rates holiday for another year, in what was believed to have applied pressure on the Chancellor to do the same. There was fear that retail and hospitality firms were going to be hit with tax bills before they were able to reopen.
Tourism and hospitality
The 5 percent reduced rate of VAT for the tourism and hospitality sector will be extended for six months to the end of September, with an interim rate of 12.5 percent for another six months after that.
The stamp duty cut will continue until the end of June, with the nil rate band set at £250,000 - double its standard level - until the end of September. This means those with transactions currently on the horizon have the chance to make a tax saving of up to £15,000 on properties worth up to £500,000.
The Chancellor confirmed an additional £1.6 billion for the coronavirus vaccine rollout and to "improve future preparedness".