Budget 2021

16/03/2021

1. Business and Jobs Support

Furlough Extending to 30 September 2021

  • Employees will receive the same pay as now

  • Employers will be expected to contribute as follows:

    • 10% in July 2021

    • 20% in August and September 2021

Self Employment Grants 4 and 5

  • If you filed a 2020 tax return by midnight 2 March 2021, you may now be eligible

    • this means 600,000 self-employed more will now be eligible

  • 4th grant: for the period Feb to April 2021 – 80% of average trading profits, up to £7,500

  • 5th grant: May to September 2021 – based on 3 months average profits, but:

    • if your turnover has fallen by more than 30%, you’ll get the 80% grant

    • if you turnover has fallen by less than 30%, you’ll get 30% of the grant

NOTE 

  • The fourth grant may be claimed from late April and the fifth by late July. 

  • The grant is claimed through an online portal. 

  • You must make the claim; it is not possible for us to make a claim on behalf of a client. 

  • On opening the portal, you will be presented with HMRC’s calculation of the grant

  • Asked to confirm that you meet the conditions. 

  • The grant will be paid within 6 working days of the application having been made.


Grants four and five will be taxable and NI-able in 2021–22.


Business Restart Grants

  • Hospitality, personal care, gyms will receive up to £18,000

  • Non-essential retail will receive up to £6,000

  • Film & TV Production – £300m in total through the Cultural Recovery Fund


These grants will be administered by your local authority. The on-line application portal is expected to be available from early April


Business Rates Holiday

  • This will be extended to 30 June 2021

  • 2/3 discount from September 2021 to December 2021


Hospitality and Tourism VAT rates

  • The 5% reduced rate of VAT will continue to 30 September 2021

  • Then 12.5% from October 2021 to April 2022

Loss Carry Back Relief

  • Carry back losses to 3 years, to reclaim business taxes paid in those years

NOTE : Applies to both Limited Companies and self Employed persons


Super Deductions

  • For the next 2 years, there’s a new 130% investment allowance, for investments in equipment etc

  • This means you can deduct 130% of the cost of the equipment from your profits, before working out the tax

NOTE : This Super Deduction ONLY applies to Limited Companies.  Self Employed persons and landlords are excluded from the scheme


New Recovery Loan Scheme

  • Businesses of any size can apply for new loans from £25k to £10m

  • Apply up to 31 December 2021

  • Government will guarantee 80% of the loan

  • Asset and invoice finance between £1k and £10m

NOTE : The scheme will launch on 6 April 2021 and full details will be available in the next few weeks. Already major banks like Barclays, Lloyds and Virgin Money have signed up to the new scheme.

Eligibility  You will be able to apply for a loan if 

  • your business is trading in the UK and that your business is viable or would be viable were it not for the pandemic, 

  • has been impacted by the coronavirus pandemic, and 

  • is not in collective insolvency proceedings.

Business that have received support under the existing Covid-19 guaranteed loan schemes will still be eligible to access finance under this scheme, if they meet all other eligibility criteria.

ALSO The current Coronavirus Bounce Back Loans and Coronavirus Business Interruption Loans (CBILS) close for new applications at the end of March 2021

Apprenticeship Bonus

  • This has been increased to £3,000 for any age apprentice

  • Extended to 30 September 2021

  • Also £7 million for new “flexi-job” apprenticeship programme, so apprentices can work for more than one employer

Training and Growth

  • Help to Grow Management:

    • Management training offered for executive development, including mentoring and peer learning.

    • Government will pay 90%

    • You will be charged £750

  • Help to Grow Digital:

    • Help for small businesses to develop digital skills, with 50% discounts on hardware and software, up to £5,000 each 

  • Register your interest here for both schemes (CTRL + Click)

  • Help for highly skilled migrants, to attract the best talent from overseas

Contactless Payments

  • Increase from £45 to £100

2. Personal Taxes and Spending

Housing

  • Stamp duty land tax  threshold of £500k will continue to September 2021

  • Then £250k from July 2021 to September 2021

  • £125k from 1 October 2021

  • Mortgage guarantee scheme will guarantee mortgages up to £600k with a 5% deposit


Personal Tax Thresholds

  • Basic rate tax band increases from £12,500 to £12,570 in 2022 and will stay til 2026

  • Higher rate increases from £50k to £50,270 in 2022 and will stay til 2026

  • Inheritance tax and pension lifetime allowance stays the same for the next 2 years

Universal Credit

  • £20 weekly increase will stay until September 2021

  • £500 one-off payment for eligible Working Tax Credit claimants

3. Funding The Spend

The Government will have put £407 billion into supporting businesses and jobs during the COVID crisis, so we need to recoup this somehow.

Here are some measures being put into place:


Corporation Tax Increase

  • For companies with profits over £50k a new 25% CT rate will be introduced in 2023

  • Profits under £50k will remain at 19%

  • Taper % for profits between £50k and £250k


As ever the devil is in the detail.  Most of the details are being worked through by the Treasury and HMRC

 

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