Spring Budget 2021
In the Spring Budget 2021 the Chancellor announced the following updates.
We have summarised some of the content of the Budget which we think will apply to our clients and SME’s. Some of the full details are not known yet, so we will update you as more information becomes available.
Coronavirus Job Retention Scheme
Extension of the Coronavirus Job Retention scheme until September 2021. Also called known as the Furlough scheme, the Government will continue to pay 80% of employees’ wages for hours they cannot work. However, in July employers will have to contribute 10% in and 20% in August and September. More details here
Self Employed Income Support Scheme (SEISS)
This has been extended to September 2021. It is estimated that another 600,000 more people who have filed a tax return in 2019-20 are now able to claim for the first time. If you qualify will be able to claim from the end of April 2021. More details here
Extension to the VAT cut to 5% for hospitality, accommodation and attractions across the UK until the end of September, followed by a 12.5% rate for a further six months until 31 March 2022.
Business Rate Relief
Eligible businesses in the retail, hospitality and leisure sectors in England will benefit from business rates relief.
Stamp Duty and Mortgage guarantee Scheme
Stamp Duty has been extended to 30th June 2021. After June 30, the limit will be lowered to £250,000 until the end of September, an return to the normal level on October 1, 202.
To support the housing market and protect and create jobs a new mortgage guarantee scheme will enable all UK homebuyers secure a mortgage up to £600,000 with a 5% deposit. This is available from major lenders.
£5 billion has been allocated for new Restart Grants – a one off cash grant of up to £18,000 for hospitality, accommodation, leisure, personal care and gym businesses in England.
Recovery Loan Scheme
A new UK-wide Recovery Loan Scheme to make available loans between £25,001 and £10 million, and asset and invoice finance between £1,000 and £10 million, to help businesses of all sizes through the next stage of recovery.
Extension of the apprenticeship hiring incentive in England to September 2021 and an increase of payment to £3,000.
Personal Tax Allowance
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
To balance the need to raise revenue with the objective of having an internationally competitive tax system, the rate of Corporation Tax will increase to 25%, which will remain the lowest rate in the G7. In order to support the recovery, the increase will not take effect until 2023. Businesses with profits of £50,000 or less, around 70% of actively trading companies, will continue to be taxed at 19% and a taper above £50,000 will be introduced so that only businesses with profits greater than £250,000 will be taxed at the full 25% rate.
Maintaining inheritance tax thresholds at their current levels until April 2026.
If you need advice on the contents of the Spring Budget 2021 and how this applies to you and your business please contact us. Visit our contact us page here