Rishi Sunak tables UK’s Budget for recovery, delays tax hike amid pandemic

British Chancellor of the Exchequer Rishi Sunak, on March 3, ironed out his first budget since the COVID-19 pandemic erupted and promised to do “whatever it takes” to protect jobs for an “investment-led” economic recovery.  The UK witnessed one of its worst recessions last year with the economy contracting by a record 20.4 per cent between April in June. The new budget aims to tackle the same with extension to small and discreet businesses, VAT cuts, investment boosts amongst other things.

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Addressing the House of Commons, Sunak said that the Furlough Scheme, which aims to provide salaries to employees on forced leave amid COVID, would be extended until September. Additionally, the new budget would also “meet the moment” with a three-part plan to protect the jobs and livelihoods of residents.

“First, we will continue doing whatever it takes to support the British people and businesses through this moment of crisis. Second, once we are on the way to recovery, we will need to begin fixing the public finances – and I want to be honest today about our plans to do that. And, third, in today’s Budget we begin the work of building our future economy,” Sunak explained.

Tax cuts and foreign investments

In the backdrop of COVID-19 induced lockdowns, the finance minister emphasized that it won’t be appropriate to raise the income tax or VAT now but they would be hiked later. He added that in 2023, the Corporation tax would be increased from the present 19  per cent to 25 per cent on high-profit firms. Meanwhile, he also stressed the reforms of a post-Brexit point-based system to help British firms attract the brightest and better international system. For this purpose, he introduced a new 'Help to Grow' scheme that will offer up to 130,000 companies across the UK a digital and management boost.

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The new budget also grants an extra 1.65 billion pounds and invest a further 50 million pounds to boost the UK’s vaccine testing capability. However, amidst rising virus cases, Sunak said that the priority continues to be supporting those hardest hit, with extensions to self-employed support, business grants, loans and VAT cuts – bringing the total fiscal support to over 407 billion pounds.

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