State of Economy and Outlook

  • The UK economy shrank by 10% in 2020
  • The OBR (Office of Budget Responsibility) has forecast that the economy will grow by 4% this year
  • It is expected that the economy will return to pre covid levels by mid 2022 with growth forecast of 7.3% for next year followed by 1.7% in 2023 and 1.6% in 2024
  • Unemplyment is expected to peak at 6.5% which is lower than the 11.9% originally predicted
  • So far 700,000 jobs have been lost since the start of the pandemic
  • A record £355bn will be borrowed by the Uk this year

Further Covid support measures announced

  • The furlough scheme will be extended to end of September 2021
  • Government will continue paying 80% of employees wages for the hours they cannot work through to June
  • in July employers will be expected to make a 10% contribution to furlough pay and 20% contribution in August and September
  • SEISS will also continue through to September with two more grant payments, fourth covering February – April and fifth covering May – September
  • Those that completed and filed an SA return by 2nd March will be eligible which is expected to bring another 600,000 newly self employed into eligibilty
  • Payments will be reduced for those whose turnover has been reduced by less than 30% due to COVID and will only receive a grant of 30% of turnover.
  • A new restart grant will be offered to businesses from April which will be up to £6000 per premise.
  • Leisure and Hospitality firms who will be delayed opening for longer will be eligible for grants of up to £18,000
  • Business rates holiday has been extended for eligible businesses for 3 months and then 2/3rds relief will be available to April 202
  • Reduced VAT rate of 5% will be extended through to September and then at 12.5% through to April 2022
  • The threshold for Stamp Duty first band on homebuying of £500k will be extended until June and then it will be £250k until September
  • Government will give first time buyers a 5% guarantee for mortgages
  • The £20 uoplift in Universal credit payments will be extended for another 6 months
  • Working tax credit claimants will be able to get a one-off £500 payment
  • The National minimum wage will be increased in April to £8.91 per hour
  • A new recovery loan scheme will be made available providing loans of between £25k and £10m which will be have 80% of the loan guaranteed by the government


  • There will be no changes in Income Tax, National Insurance and VAT rates
  • The Personal allowance will be increased to £12570 for 2021-22 and then be frozen until April 2026
  • Corporation tax on Company profits will be increased to 25% from April 2023
  • Companies with profits up to £50,000 will see corporation tax remain at 19% and there will be tapering rates of Corporation tax from profits under £250,000
  • Losses of up to £2m will be allowed to be carried back for 2 years
  • There will be a ‘Super Deduction’ of investments made by businesses against tax for 2 years which will amount to 130% of the investment (so in effect an additional tax reduction of 5.7%
  • No changes will be made to Capital Gains tax, Inheritance tax or Lifteime paension allowance
  • £100m to be provided for increase in HMRC investigators

Sport and the arts

  • £400m will be made available to support arts venues including museums and galleries
  • £300m recovery package for professional sport and £25m for grassroots sport

Support for Regions and Nations

  • £1.2bn in funding for the Scottish government, £740m for the Welsh government and £410m for the Northern Ireland executive
  • 750 UK civil servants to be relocated to new Treasury campus in Darlington
  • £150m for community groups to take over pubs, sports clubs and similar establishments at risk of closure
  • 8 sites for Freeports in England were announced

Digital, Science and Environment

  • Tax breaks for firms to “unlock” £20bn worth of business investment
  • Incentive grants for apprenticeships to rise to £3,000 and £126m for traineeships
  • New visa scheme to help start-ups and rapidly growing tech firms source talent from overseas
  • Contactless payment limit will rise to £100 later this year
  • New UK Infrastructure Bank to be set up in Leeds with an intial capitalisation of £12bn
  • £15bn in green bonds, including for retail investors, to help finance the transition to net zero by 2050


  • All duties on alcohol to be frozen
  • No additional duties on spirits, wine, cider and beer
  • Fuel duty to be frozen for the eleventh year