Chancellor Rishi Sunak has unveiled the contents of his Budget in the House of Commons.
He is setting out the government’s tax and spending plans for the year ahead. Here is a summary of the main points you need to know as a business:
Economy and Public Finances
- Inflation in September was 3.1% and is likely to rise to average 4% over next year.
- UK economy forecast to return to pre-Covid levels by 2022.
- Annual growth set to rebound by 6.5% this year, followed by 6% in 2022.
- Unemployment expected to peak at 5.2% next year, lower than 11.9% previously predicted.
- Wages have grown in real terms by 3.4% since February 2020 and the national living wage is expected to £9.50 from £8.91.
- Borrowing as a percentage of GDP is forecast to fall from 7.9% this year to 3.3% next year.
- Borrowing as a percentage of GDP will then fall in the following four years to 1.5%.
- Foreign aid spending projected to return to 0.7% of GDP by 2024-25.
Taxation and Spending
- Business rates retained and reformed.
- New 50% business rates discount will apply in the retail, hospitality, and leisure sectors, up to a maximum of £110,000.
- Planned rise in fuel duty to be cancelled amid the highest pump prices in eight years.
- A 4% levy will be placed on property developers with profits over £25m rate to help create a £5bn fund to remove unsafe cladding.
Government spending
- Levelling Up Fund will mean £1.7bn invested in local areas across the UK.
- Government backing projects in Aberdeen, Bury, Burnley, Lewes, Clwyd South, Stoke-on-Trent, Ashton under Lyne, Doncaster, South Leicester, Sunderland and West Leeds.
- Tax relief for museums and galleries will be extended for two years, to March 2024.
- £6bn of funding to help tackle NHS backlogs.
- £7bn for transport projects in areas including Greater Manchester, the West Midlands and South Yorkshire.
Air Travel
If you travel for business…
- Flights between airports in the UK nations will be subject to a new lower rate of Air Passenger Duty from April 2023
- Financial support for English airports to be extended for a further six months
- A new ultra long haul band in Air Passenger Duty for flights of over 5,500 miles will be introduced from April 2023
We will update this blog when more information is released.
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