Budget 2021: Key Announcements That Caught our Attention

The Spring 2021 Budget was delivered by Rishi Sunak on 3rd March 2021. Here we highlight some of the announcements that caught our eye.

Carbon Price Support & UK ETS

​The government announced it will continue the freeze on carbon price support (CPS) rates at £18 per tonne of carbon dioxide equivalent in 2022-23. The government sees carbon pricing as a good way of encouraging decarbonisation and made clear its intention to outline further proposals to expand the UK Emissions Trading Scheme (UK ETS).

Infrastructure Bank

It was announced a new infrastructure bank will be launched later in Spring 2021. The bank will support the private sector and local government in investing in the UK’s infrastructure. The bank will have £22 billion of financial capacity to help achieve its many goals. One of the main goals is to support the UK achieve the 2050 net zero target and to provide support to local authority and private sector infrastructure projects.

The bank will target economic infrastructure sectors featured in the National Infrastructure Strategy such as transport, waste, and clean energy, to name just a few. The bank will be headquartered in Leeds and is scheduled to open in interim form in Spring 2021.

Build Back Better Plan

The government has published its Build Back Better plan which outlines the government’s plans to drive economic growth by investing in infrastructure, innovation, and skills.

Click here to view the plan.

Environmental Taxes

A new plastic packaging tax will come into force on 1 April 2022 to encourage the use of recycled plastic in packaging. The draft legislation is currently undergoing technical consultation and is hoped to be introduced in Finance Bill 2021.

The legislation will likely include:

  • A £200 per tonne tax rate for packaging with less than 30% recycled plastic
  • detail on the scope of the tax of the type of taxable product and recycled content
  • an exemption for producers and importers of small quantities of plastic packaging
  • detail on who will be liable to pay the tax and the need to register with HM Revenue & Customs (HMRC)
  • detail on how the tax will be collected, recovered and enforced

It was announced the aggregates levy rate for 2021 will be frozen to 2022 but the government plans on returning to index-linking in the future. In HMRC: Changes to Landfill Tax rates from 1 April 2021: Policy paper, HMRC detailed the increase to standard and lower rates of landfill tax for England & Northern Ireland in 2021 in accordance with the Retail Prices Index (RPI).