The Budget 2021: What You Need To Know​

Once a year, the Chancellor of the Exchequer (the person in charge of the UK's finances) makes a statement. In that statement, they discuss the state of the economy and outline plans for taxes and spending. That's the Budget.

Normally the Budget takes place in Autumn, but you may have noticed that we had another Budget in March this year. That's because 2020's Autumn Budget was postponed due to the pandemic.

Here is the lowdown on today's budget:

Economy

The Budget's theme was about preparing for a new economy after Covid. The UK economy is forecasted to grow faster than expected, returning to its pre-pandemic size in early 2022.

Investment
  • The Levelling Up Fund announced its first grants, with £1.7bn in funding to at least 100 projects, in locations such as Leeds, Leicester, Stoke and Sunderland
  • £21bn will be invested in roads and £46bn on railways for improve networks between cities
  • £20bn will be invested in research and development by 2024-25
  • £850m will be invested to restore and upgrade museums, libraries and galleries
  • Funding will be provided for the UK to launch a rocket into orbit in 2022
  • £11.5bn will be invested in building 180,000 affordable homes and £1.8bn in bringing brownfield land into use
  • The Annual Investment Allowance increase will be extended for businesses
  • Green investments: £6.1bn will be invested in greener transport, £380m for the offshore wind sector, £3.9bn to decarbonise buildings, and billions will be spent across several nuclear energy investments
  • Local governments will receive a larger rise in funding
Tax and Duties
  • The surcharge on bank profits will be cut (from 8% to 3%)
  • Alcohol duties have been simplified, with stronger alcohol receiving higher rates - shares in pub companies rose in response
  • The expected multiplier of business rates has been frozen for 2022 and 2023, the time for revaluations has fallen to three years (compared to five), and certain hospitality, retail and leisure businesses will receive a tax cut
  • Tax relief for theatres, museums, galleries and other cultural organisations will be temporarily doubled
  • Fuel duty will be frozen (again), domestic air passenger duty will fall, while duties on particularly long-haul flyers will rise
Productivity and Employment
  • The minimum wage will rise in 2022 from £8.91 to £9.50 an hour
  • £4.7bn will be invested in UK schools, with a proportion used to help post-pandemic recovery