Budget 2021

03/03/2021

The Chancellor Rishi Sunak has delivered his 2021 budget.  Below is a summary of the main points to help the UK recover from the COVID pandemic.

• The furlough scheme is to be extended until the end of September 2021.  The furlough will continue to cover up to 80% of an employee's salary for hours they cannot work up to a maximum of £2,500 per month.  Employers will need to contribute 10% of the salary in July 2021 with the government contributing 70%, then in August & September 2021 employers will contribute 20% with the government contribution being 60%.

 

• The 4th Self Employment Income Support Scheme (SEISS) will be claimable from late April until 31st May 2021 covering the months February - April 2021 and will be set at 80% of 3 months average trading profits (capped at £7,500), taking into account the 2020 tax returns.  More details can be found here.

 

• The 5th and final SEISS grant will cover the months May - September 2021 and claims can be made from late July.  The grant will be based on how much the businesses turnover had reduced in the year April 2020 - April 2021.  If the turnover has reduced by at least 30% then the grant will be 80% of the 3 months average trading profits, capped at £7,500.  If turnover is < 30% down then the grant will be 30% of the 3 month average capped at £2,850.

 

• Restart grants available for non-essential retailers up to £6k per premises and hospitality venues up to £18k depending on their rateable value.

 

• The National Living Wage for those aged 23 and above is set to increase to £8.91 from 1st April 2021.

 

• The apprenticeship hiring incentive has been increased to £3,000 and been extended to September 2021.

 

• The Universal Tax Credit increase of £20pw has been extended for six months.

 

• Business rates holiday extended for another 3 months until the end of June 2021 for gyms and non-essential retail premises.  Then discounted to 1/3 of the normal charge for the 6 month period to the end of December 2021.

 

• The 5% reduced rate VAT for hospitality, accommodation and attractions has been extended until the end of September 2021.  Then a temporary 12.5% VAT rate will be introduced until the end of March 2022.

 

• Personal tax thresholds are to be frozen until 2026 after a miserly increase in April 2021 to the personal allowance (£12,570) and the basic rate band (£50,270).

 

• Corporation tax rate is due to increase from 19% to 25% in April 2023.  This will apply to companies with a turnover in excess of £250k.  Companies with profits of £50k or less will fall into the small profits rate and continue to be taxed at 19%.  A tapered rate will be introduced for profits above £50k.

 

• A new 130% super-deduction first year capital allowance for qualifying plant & machinery assets and a 50% first year allowance for qualifying special rate assets will be introduced for 2 years from April 2021.

 

• Coronavirus Business Interruption Loan Scheme (CBILS) is to be replaced with a new recovery loan scheme.  Businesses of any size can apply from £25k to £10m up to the end of 2021.  The government will provide a guarantee to lenders of 80%.

 

• The stamp duty threshold of £500k has been extended until 30 June 2021.  This is then reduced to £250k up to the end of September 2021 before returning to the normal £125k.

 

• A new mortgage guarantee scheme will enable UK homebuyers to secure a mortgage up to £600k with a 5% deposit.

 

• No change to Inheritance tax threshold of £325k until April 2026 and VAT threshold of £85k until April 2024.

 

• Contactless payment cap has increased to £100.

 

• Planned increase in alcohol and fuel duties to be frozen.

Further details and guidance on all of the above can be found by visiting the GOV.UK website

Privacy Notice