Budget: Duty frozen across the board

The Chancellor has frozen duty across the board in his 2021 Budget.

ALCOHOL and tobacco duties will remain at current levels, Chancellor Rishi Sunak has confirmed in his 2021 Budget.

Duties across beer, cider, wines, spirits and tobacco have all been frozen, with a planned hike in fuel duty also cancelled. A tobacco duty increase is expected in November.

The National Living Wage (NLW) rise scheduled for April will still go ahead, with hourly rates for NLW workers increasing by 2.2% from £8.72 to £8.91. NLW, which is currently paid to those aged 25 and over, will now apply to workers aged 23 and over.

The National Minimum Wage will also increase, with the rate for workers aged 21 to 23 increasing from £8.20 to £8.36; 18 to 20 up from £6.45 to £6.56; and 16 to 17 increasing from £4.55 to £4.62. The rate for apprentices will increase by 15p to £4.30.

On Covid-19, the Chancellor announced a new UK-wide Recovery Loan Scheme. The scheme will replace the existing government guaranteed loan schemes, scheduled to close at the end of this month, which the Chancellor said have supported £73 billion of lending to date. From 6 April, the Recovery Loan Scheme will provide lenders with a guarantee of 80% on eligible loans between £25,000 and £10 million. The scheme will be open to all businesses, including those that have already received support under existing Covid-19 guaranteed loan schemes.

The Chancellor also announced changes to corporation tax, set to come into force in 2023. The tax will rise to 25% for businesses with profits of more than £50,000. Those with profits totalling £50,000 or less will pay a new Small Profits Rate set at 19%.

Other announcements in Sunak’s Budget included an extension of the furlough scheme until September, with increases in employer contribution throughout the summer. The scheme will continue as is until July, when businesses will be asked to contribute 10% of furloughed employee’s salaries, rising to 20% in August.

Responding to the Chancellor’s Budget, David Lonsdale, director of the Scottish Retail Consortium, said: “There is much retailers will welcome from the Chancellor’s Budget. The continuation of the furlough scheme is sensible and necessary with non-essential retailers remaining closed and without a firm date for re-opening – albeit we would question what will take its place if there are further lockdown restrictions later in the year.

“The announcement of further business rates relief will not directly affect Scottish shops, but the Barnett consequential revenues from the Chancellor’s decision should hopefully ensure the more generous 100% year-long relief for Scottish retail and hospitality envisaged by the Finance Secretary can now be confirmed.”