Chancellor Rishi Sunak presented his 2021 Budget on Wednesday 3rd March. We have briefly summarised the top headlines business owners and employees need to be aware of, this page will be changing with more updates so keep an eye on it:
Companies
– Furlough will be extended until end of September 2021. Still at 80% of salary. Businesses will be asked to contribute 10% from July and 20% for August and September 2021.
– Small and medium-sized employers in the UK will continue to be able to reclaim up to two weeks of eligible Statutory Sick Pay (SSP) costs per employee from the Government.
– A new recover loan scheme launched – Businesses of any size can apply loans from £25,000 up to £10m. Govt. to provide 80% guarantee to lenders.
– 100% Business rates holiday April to June. 2/3rd (66%) discount for the rest of the year.
– The Apprentice hire grants will increase from £1500 to £3000
– New Restart Grant – Non essential retail will receive £6000 per premises. Hospitality, leisure and personal care will receive £18,000.
– New Recovery Loan scheme – Loans of £25k to £1m. 80% government guarantee.
– 5% VAT reduction for hospitality will be extended to 30th September. It will then increase to 12.5% to March 2022 and increase to 20% from April 2022.
– Corporation tax to rise to 25% from April 2023. Businesses with profits under £50k tax will remain at 19%. Businesses with profit between 50K – 250K will be subject to a tapered tax charge.
– The “Super Deduction” – Over the next two years, when businesses invest in new equipment, they can offset the full cost for tax purposes plus an additional 30%.
– No National Insurance, Income Tax or VAT increases, instead, there is a freeze on the personal tax threshold until April 2026
– Inheritance tax, Capital gains, Pensions lifetime allowance – All will be frozen until 2026 too like Personal tax allowance.
– Non-essential retail businesses to receive grants of up to £6,000 per premise
– Hospitality and leisure businesses impacted by restrictions – expect grants up to £18,000.
– The government is extending the loss carry back rules worth up to £760,000 per company.
– “Help to grow – Management” and “Help to grow – Digital” training for SMEs launched – will be effective from June 2021. Govt will offer subsidised management training (fee – £750 , 10% of unit cost) and will be given vouchers to get up to 50% off the purchase of new productivity-enhancing software, up to £5,000 each to all eligible SMEs. Registration open.
Employees/Self employed
– Furlough will be extended until end of September 2021. Still at 80% of salary. Businesses will be asked to contribute 10% from July and 20% for August and September 2021.
– Self-employed grant to be extended. A 4th grant will be available in May 2021 and a 5th grant will be available in July 2021. These will be open to anyone submitting their 2019-20 tax return by 2nd March
– Self-employed grant Turnover limits. If your turnover has fallen more than 30% you will receive 80%. If it is less than 30% then you will receive a 30% grant,
– The universal credit £20 uplift will continue for 6 months
– The minimum wage will increase to £8.91 per hour from April.
– Stamp duty cut extended by three months.
– No National Insurance, Income Tax or VAT increases, instead, there is a freeze on the personal tax threshold until April 2026
For more information on the budget or any of the points above, please contact AEL Markhams and we will be happy to advise.
