Furlough scheme
- Furlough extended until Sept 2021.
- Employers to contribute 10% in July.
- Employers to contribute 20% August and September employer contribution.
SEISS support
Self-Employment Income Support Scheme (SEISS)
Budget 2021 has confirmed details of a fourth grant. This will be 80% of three months’ average trading profits to be claimed from late April 2021. Payment will be in a single instalment capped at £7,500 in total and will cover the period February to April 2021. The scheme has been extended to those who have filed a 2019/20 self assessment tax return prior to 3 March 2021. This means that the newly self-employed from April 2019 now qualify subject to satisfying the other conditions.
A fifth and final grant was announced and can be claimed from late July 2021 to cover the period May to September 2021. This grant will be determined by a turnover test. Where the self-employed business turnover has fallen by 30% the grant will be worth 80% of three months’ average trading profits capped at £7,500. People whose turnover has fallen by less than 30% will receive a 30% grant, capped at £2,850.
National Minimum wage
- National minimum wage and National Living Wage: £8.91 from 1 April 2021.
Apprentice support for employers
- The government will extend and increase the payments made to employers who hire new apprentices. Employers who hire a new apprentice between 1 April 2021 and 30 September 2021 will receive £3,000 per new hire, compared with £1,500 per new apprentice hire (or £2,000 for those aged 24 and under) under the previous scheme.
Universal Credit
- The Universal Credit top-up of £20-per-week will continue for a further six months,
It will be paid as a one-off payment of £500.
Business rate holiday increase
- The 5% reduced rate of VAT for tourism and hospitality will be extended for six months to the end of September 2021.
- The 100% business rates holiday in England will continue from April until June 2021.
Other support for veterans and domestic violence
- £19m is announced for domestic violence programmes.
- £10m to support veterans with mental health.
Business grants and support
- New restart grant in April 2021, £6000 per premise for non essential services.
- Hospitality and gyms will get a grant up to £18,000 for opening later during the year.
- New recovery loan scheme business any size £25-£10m (80% guarantee by the government)
- Extension to the VAT cut to 5% for hospitality, accommodation and attractions until the end of September, followed by a 12.5% rate for a further six months until 31 March 2022.
- In April 2022 the VAT return to 20%.
Stamp Duty and Land Tax (SDLT)
- Tapered extension of the stamp duty holiday until 30 September.
- The mortgage guarantee scheme will encourage lenders to lend mortgages of up to 95%.
- £500K nil rate band end 30 June 2021.
- From 1 July 2021 the Nil rate band will reduce to £250K until 30 September 2021.
- 1 October 2021 the Nil rate band will return to £125K.
New policy for owning home program
- 95% mortgages from next month.
- The chancellor announces the up-to-£500,000 “nil-rate band” for stamp duty extended to the end of June 2021.
- He says first-time buyers will get a “government guarantee” on mortgages, with a deposit of 5%, while 95% is financed by mortgages (Lloyds, Santander).
Income Tax, Inheritance tax, Capital gains tax and VAT
- Basic allowance to increase to £12,570 until 2026.
- Higher rate threshold to increase to £50,270 until 2026.
- No changes to Income tax, VAT, National Insurance.
- National insurance Primary threshold /lower profits limit to £9,568 and the Upper Earnings Limit (UPL) to £50,270 until April 2026.
- IHT and pension and CGT to remain unchanged.
- VAT registration of £85,000 and de registration £83,000 to remain the same until 1 April 2024.
- £100m investment in HMRC and to employ 1,265 investigators to combat fraud with Covid 19 support packages (CJRS and SEISS).
Corporation tax
- From April 2023 the rate of Corporation Tax paid on company profits will increase to 25% (currently 19%)
- Companies with profits under £50,000 will remain at 19%.
- Corporation tax tapered relief between £50K-£250K who will pay less than the main rate of 25% in April 2023.
Pensions and Savings Tax
- Pensions Lifetime Allowance will remain at the current level of £1,073,100 until April 2026;
- Starting rate for savings tax band will remain at £5,000, rate at 0% for 2021-22.
- Individual Saving Accounts (ISA) to remain £20,000.
- Junior ISAs or Child Trust Funds remain at £9,000.
Duty on Alcohol, Fuel and Tobacco tax
- All alcohol duties and fuel taxes are frozen.
Van benefit charge nil-rating for zero-emission vans
From 6 April 2021, a nil rate of tax applies to zero-emission vans within the van benefit charge. In 2020/21 such vans have a van benefit charge at 80% of the standard flat rate of £3,490.
Tax losses
A temporary extension of the period over which businesses may carry trading losses back for relief against profits of earlier years to get a repayment of tax paid will have effect for company accounting periods ending in the period 1 April 2020 to 31 March 2022 and for tax years 2020/21 and 2021/22 for unincorporated businesses.
Trade loss carry back will be extended from the current one year entitlement to a period of three years, with losses being carried back against later years first.
For companies, after carry back to the preceding year, a maximum of £2 million of unused losses will be available for carry back against profits of the same trade to the earlier two years. This £2 million limit applies separately to the unused losses of each 12 month period within the duration of the extension.
For individuals a separate £2 million cap will apply to the extended carry back of losses made in each of the tax years 2020/21 and 2021/22.
The £2 million limit applies separately to the unused losses of each tax year within the duration of the extension. Income Tax payers will not be subject to a partnership-level limit.
Source HM Treasury, BBC, HMRC