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On Wednesday 27th October, Rishi Sunak has announced his latest budget. In his Autumn Budget 2021 opening remarks, he vowed to give people the support they need with the cost of living increasing. He stated his budget will deliver a stronger economy for the people of Britain. Whilst he admitted the budget doesn’t draw a line under COVID, he goes on to say it will begin the work of making the economy stronger post-pandemic. Sunak said the budget would help towards “an economy of higher wages, higher skills and higher productivity.”

Here we look at some of the key points from the Autumn Budget 2021.

Autumn Budget 2021 – Key Points

Update on the State of Economy and Government Spending

  • Inflation is 3.1% and is likely to rise to 4% in the next 12 months
  • UK economy to be on a par with pre-COVID levels by 2022
  • Unemployment will be much lower than anticipated next year, at 5.2%
  • Annual growth for 2021 is expected to be 6.5%
  • £6 billion of funding pledged to the NHS to help reduce backlogs
  • £2.2 billion pledged for the criminal service including courts and prison, to help with backlogs

Taxation and Wages

  • Universal Credit taper rate will reduce from 63% to 55%, helping people to keep more of the payment
  • National Living Wage to increase  from £8.91 to £9.50 per hour
  • Business rates reduction of 50% for sectors hit hardest during COVID. This includes the retail, hospitality and leisure sectors in England
  • Further business rates reform to support companies, including a 12-month relief for firms to invest in property
  • Fuel Duty increase to be canceled in light of the recent increase in fuel prices

Education

  • Schools will get an extra £4.7 billion by 2024-2025
  • Additional £2 billion of funding to help schools and colleges to recover from COVID

Housing

  • To help find £5 billion to remove unsafe cladding, a 4% levy is placed on larger property developers (with profits over £25 million)
  • £24 billion pledged for new housing
  • £640 million a year to help the homeless

Alcohol

  • Increase in duty on spirits, beer, wine and cider canceled
  • Slight increase in stronger wines and ciders

Air Travel

  • Extension of financial support for Englisg airports
  • Flights in the UK will have a lower rate of Air Passenger Duty from 2023
  • Introduction of a new ultra-long haul (5,500 miles plus) band of Air Passenger Duty in 2023

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Nigel Carr

Nigel Carr

Nigel is a freelance financial writer and Author at Kinsella Tax. A business graduate he writes on financial matters as well as music for a number of high quality websites.