Rishi Sunak has announced the extension of both VAT cuts for the hospitality and tourism industries, as well as prolonging the end of the stamp duty holiday, in this year’s “fiscal firepower” Budget.
Purchases up to £500,000 will continue to be free from the tax – and homes bought up to a value of £250,000 until the end of September, the chancellor confirmed.
Speaking in the Commons, he told MPs more than 700,000 people have lost their jobs since March 2020 and the economy has shrunk by 10 per cent - the largest fall in more than 300 years. But he said the UK’s GDP is set to return to its pre-Covid peak in mid-2022, according to the Office for Budget Responsibility (OBR), which is six months earlier than previously anticipated.
Mr Sunak also revealed that the headline rate of corporation tax will rise from 19 per cent to 25 per cent from 2023, effectively reversing the policy of his predecessor George Osborne - though it still leaves Britain with the lowest rate of such a tax in the G7, below countries like US, Germany, and Canada.
Elsewhere, the chancellor pledged an additional £1.6bn for the coronavirus vaccine rollout and to “improve future preparedness”, as well as separate visa reforms for “highly skilled migrants”, in what he said is a combined move by the UK to become a “scientific superpower”.
