03 Mar Budget 2021 Highlights

Posted at 16:07h in Something New, Uncategorized by Kevin Batty
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Below are the main points from the 2021 Budget with many of the measures being leaked by the government prior to today. 

In short there is more help for the economy with many of the tax rises not being introduced for a couple of years.  The autumn statement is likely to hold more measures.

Further COVID Support:

  • Extension of furlough scheme until September.  After July businesses will need to contribute 10%, rising to 20% in August and September
  • Extension of Self Employed Income Support Scheme (SEISS) until September
  • 4th SEISS grant will provide 80% support for those whose turnover has dropped by more than 30%
  • 5Th SEISS grant from May open for claims from July
  • Newly self-employed persons previously excluded will now be eligible for the 4th and 5th claims

New Recovery Loan Scheme:

  • Offering loans from £25,000 to £10m up to the end of the year, with the government providing 80% guarantee
  • This replaces the bounce back and coronavirus business interruption loan schemes which finish in March

Restart Grants:

  • Non-essential retail businesses will receive grants of up to £6,000 per premises via local councils
  • Hospitality and leisure businesses will receive grants of up to £18,000 per premises via local councils
  • These will replace the current monthly grant system from April

Property:

  • Business rate holiday extended until end of June.  The remaining nine months of the year rates will be discounted by two thirds for closed businesses with a lower cap for those able to stay open
  • Extension of £500,000 nil rate band stamp duty holiday until end of June
  • The stamp duty nil rate band will be £250,000 until end of September
  • Government guarantee support for 95% mortgages available to current homeowners and as well as first time buyers for houses up to £600,000

Tax Rates:

  • Income tax thresholds frozen for basic rate tax at £12,570 and higher rate at £50,270 until 2026.  This will act as a ‘stealth tax’ on individuals
  • Corporation tax rate to increase to 25% for profits over £50,000 from 2023
  • The introduction of a corporation tax small profits rate of 19% for profits up to £50,000.  Then an incremental increase to £250,000 so only companies with profits of over this will pay the full 25%
  • Introduction of “super deduction tax relief” for companies so they will receive 130% tax relief on the cost of capital machinery investments for two years
  • Company loss carry back extended from 1 to 3 years
  • No increase in fuel or alcohol duties
  • Inheritance tax thresholds, capital gains annual exempt amount and pensions lifetime allowance maintained at current levels until April 2016
  • 5% VAT rate for hospitality extended to 30 September then a 12.5% rate for 6 months

Net Zero and Green Growth:

  • New UK infrastructure bank based in Leeds to boost investment in green projects and reaching net zero and levelling up targets
  • Sovereign green savings bonds for retail investors, allowing savers to help drive the transition to net zero by 2050

Employees:

  • National Living Wage (NLW) to increase to £8.91 per hour from April applying to 23 years olds and older from 1 April
  • NLW £8.36 per hour for 21 to 22 year olds from 1 April
  • NLW £6.56 per hour for 18 to 20 year olds from 1 April
  • NLW £4.62 per hour for under 18 year olds from 1 April
  • NLW £4.30 per hour for apprentices from 1 April
  • Doubling the incentive to employ apprentices to £3,000 per apprentice

Help to grow:

  • Give small businesses free online technology and 50% discounts on new productivity software
  • Give leaders of SME access to world class training

If you have any questions please get in touch.