Spring
Budget 2021
A budget of extended coronavirus support and tax threshold freezes – Chancellor Rishi Sunak has unveiled Government support and tax plans for the year ahead.
Take a look at some of the announcements, which include a new business recovery loan scheme, 95% mortgages and relief for small businesses from the corporation tax increase.
Coronavirus Support
Furlough scheme extended to September
Government to continue paying 80% of employee wages for hours they cannot work. Employers to contribute 10% in July and 20% in August and September.
Self-employment support scheme extended
Government to pay a fourth grant for February to April at 80% of average trading profits.
The government will pay a fifth grant for May to September at 80% for people whose turnover has fallen by more than 30%. For people whose turnover has fallen by less than 30% will receive a 30% grant.
The system will open to claims from late July provided a tax return for 2019/20 was filed by midnight on Tuesday, 2nd March 2021.
New business recovery loan scheme
As the Bounce Back Loan and CBIL programmes come to end on 31 March 2021, these will be replaced by a new recovery loan scheme 80% guaranteed by the government.
Businesses of any size can apply for loans from £25,000 up to £10m through to the end of this year.
Grants for salons, shops, pubs, clubs and gyms
The Chancellor confirms £5bn of new restart grants for businesses. The government will pay up to £6,000 for non-essential retailers and £18,000 for restaurants, pubs, personal care and gym businesses which will reopen later.
Business rates holiday extended
Business rates holiday in England will continue at 100% from April until June. For the remaining nine months of the fiscal year, they will still be discounted by up to two thirds.
Reduced rate of 5% VAT extended
Reduced rate of 5% VAT for the hospitality and tourism sectors has been extended to the end of September. The rate will go up to 12.5% from October, before returning to 20% in April 2022.
Taxation
No changes to rates of income tax, national insurance or VAT
Personal income tax allowance to be frozen at £12,570 from 2022 to 2026. Higher rate income tax threshold to be frozen at £50,270 from 2022 to 2026.
This does remove the incremental benefit created when thresholds continue to increase with inflation.
The inheritance tax thresholds, pension lifetime allowance, the annual exempt amount for Capital Gains will also be frozen until April 2026.
The VAT registration threshold will be frozen at £85,000 for 2 years from April 2022.
Corporation tax to increase to 25% in 2023
The rate of corporation tax paid on company profits will increase to 25% in April 2023.
However, companies with £50,000 or less will continue to pay the current rate of 19%. A taper will be introduced for profits between £50,000 to £250,000 so that only businesses with profits above this will be taxed at the full 25% rate.
Corporation tax 'super-deduction'
Companies investing in qualifying new plant and machinery can reduce their taxable income by 130% of the amount they invest from April 2021.
Tax treatment of losses
Companies will be able to offset losses against their tax bills going back up to three years.
Minimum wage
The minimum wage will increase to £8.91 an hour from April 2021.
Alcohol duty
Planned increases in duties on beer, cider, spirits and wine as well as fuel will be cancelled.
Housing
Stamp duty holiday extended
The stamp duty holiday on properties worth up to £500,000 will be extended until the end of June.
There will be no stamp duty on homes worth up to £250,000 from July for another three months.
The threshold will then return to the usual level of £125,000 from October.
95% mortgages
The government will guarantee 95% mortgages to help those who can only afford a 5% deposit on houses up to £600,000.
Business Support
Incentive payments for hiring new apprentices
Incentive payments for hiring new apprentices are being doubled to £3,000.
Help to grow schemes
A ‘help to grow’ scheme will offer smaller businesses management and digital training. Register your interest using the link below.
helptogrow.campaign.gov.uk
Arts and sport
£400m to help arts venues re-open in England, including museums and galleries. The Government also announced a £300m recovery package for professional sport and £25m for grassroots football.
Benefits
Universal credit
The temporary increase of £20 a week in universal credit will continue for a further six months.
There will also be a one-off payment of £500 to working tax credit claimants.
