Budget 2021 | Other announcements

Below are a few other announcements not specific to business owners that we thought we would give a brief overview of.

Alcohol duty system radically simplified

The Chancellor said he was “radically” simplifying alcohol duty by introducing a system designed around the principle, “the stronger the drink, the higher the rate”.

First, the UK’s main duty rates on alcohol will be cut from 15 to 6.

Some drinks, like stronger red wines, fortified wines or high-strength white ciders will see a small increase in their rates. However, many lower alcohol drinks – such as rose, fruit ciders and liqueurs will attract a lower tax rate than currently.

There was also an announcement of a new “small producer relief” to include small cidermakers and other producers making alcoholic drinks with less than 8.5% strength.

The cost of a draught pint will be permanently cut by 3p.

The planned increase on alcohol duty will also be cancelled.

Fuel duty increase cancelled

The planned fuel duty increase will be cancelled because pump prices are at their highest level in eight years.

Universal credit rates cut

The Chancellor announced the Universal Credit taper rate will be cut by 8%, bringing it down from 63% to 55%. This means for every extra £1 someone earns, their Universal Credit is reduced by 55p rather than 63p.

Rather than wait until the new tax year, this will be introduced immediately – no later than 1^st December 2021.

National Living Wage increased

The announcement of the National Living Wage increase was actually announced by the Chancellor Pre-Budget. The announcement sees workers on minimum wage are set to get a pay boost from April, with the rate of those aged over 23 rising to £9.50 an hour from £8.91. The rise means a full-time worker will get £1,074 extra a year before tax.

The National Minimum Wage for people aged 21-22 will rise from £8.36 to £9.18 an hour and the Apprentice Rate will increase from £4.30 to £4.81 an hour.

Other items:

• NHS spending to increase by £44 billion
• Schools will receive an extra £4.7 billion by 2024/25
• £11.5 billion for new affordable homes
• Increased transport funding with “enough to fill one million more potholes a year”
• Internal domestic flights will have air passenger duty cut