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BUDGET 2021

Budget 2021

Author: Mandy Crossley – MC Accounting & Business Solutions

I am sure that most of you have heard parts of the Budget 2021 on today by Chancellor Rishi Sunak so I thought I would put together some of the main points from today

Coronavirus Job Support Scheme

Furlough has now been extended to September 2021. Employees will continue to get 80% of their wages for any hours not worked.

In July Employers will be contributing 10% and government 70%.

In August & September Employers will be contributing 20% and government 60%.

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.

SEISS Grants (Self Employed)

Now available for self employed people that have submitted there 2019/2020 tax return by midnight on 03/03/2021.

Grant 4 payable for Feb – Apr (claimed from April).

Grant 5 payable for May onwards (claimed from late July).

Under the grant, those whose turnover has fallen by 30% or more will continue to receive the full 80% grant.

People whose turnover has fallen by less than 30% will therefore have less need of taxpayer support and will receive a 30% grant.

Retail & Hospitality

Eligible businesses in the retail, hospitality and leisure sectors in England will benefit from business rates relief.

New Restart Grants – a one off cash grant of up to £18,000 for hospitality, accommodation, leisure, personal care and gym businesses in England.

Universal Credit

The extra £20 will be extended for a further 6 months.

Working Tax Credits

A one-off payment of £500 to eligible claimants across the UK.

Test and Trace support

Payment of the £500 for self-isolation if you cannot work from home in England extending until the summer.

Personal Tax Bands

The Personal Allowance will increase to £12,570, the higher rate threshold, NICs Upper Earnings Limit and NICs Upper Profits Limit will all increase to £50,270, and the NICs Primary Threshold/Lower Profits Limit will increase to £9,568 for 2021 to 2022.

        
 BandTax Rate2020 to 20212021 to 20222022 to 20232023 to 20242024 to 20252025 to 2026
Personal allowance0%Up to £12,500Up to £12,570Up to £12,570Up to £12,570Up to £12,570Up to £12,570
Basic rate20%£12,501 to £50,000£12,571 to £50,270£12,571 to £50,270£12,571 to £50,270£12,571 to £50,270£12,571 to £50,270
Higher rate40%£50,001 to £150,00£50,271 to £150,00£50,271 to £150,00£50,271 to £150,00£50,271 to £150,00£50,271 to £150,00
Additional rate45%over £150,000over £150,000over £150,000over £150,000over £150,000over £150,000

National Minimum Wage

Increase of National Living Wage to £8.91 from April.

 Rate from April 2020Rate from April 2021Increase
National Living Wage£8.72£8.912.20%
21-24 Year Old Rate£8.20£8.362.00%
18-20 Year Old Rate£6.45£6.561.70%
16-17 Year Old Rate£4.55£4.621.50%
Apprentice Rate£4.15£4.303.60%

Apprenticeship incentive

Extension of the apprenticeship hiring incentive in England to September 2021 and an increase of payment to £3,000.

Corporation Tax

Corporation Tax will increase to 25% from 2023. Businesses with profits of £50,000 or less will continue to be taxed at 19%. A tapered rate will also be introduced for profits above £50,000, so that only businesses with profits of £250,000 or greater will be taxed at the full 25% rate.

VAT

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.

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.

Home Buyers

An extension to the temporary cut in Stamp Duty Land Tax in England and Northern Ireland until September 

£500,000 extended to 30/06/2021

£250,000 from 01/07/2021 to 30/09/2021

Back to old rate of £125,000 from 01/10/2021

Starting in April, the government will provide a guarantee to lenders who offer mortgages to people with a deposit of just 5% on homes with a value of up to £600,000 for first time buyers.

Other Items

More than doubling the legal limit for single contactless payments, from £45 to £100.  It will come into legal effect today, but in practice will take firms a while to implement.

£10 million to support veterans with mental health needs across the UK.

£19 million to tackle domestic abuse in England and Wales, with funding for a network of ‘Respite Rooms’ to support homeless women and a programme to prevent reoffending.

£90 million funding to support our government-sponsored national museums in England due to the financial impact of Covid-19.

£300 million for major spectator sports, supporting clubs and governing bodies in England as fans begin to return to stadia.

Maintaining inheritance tax thresholds at their current levels until April 2026.

Fuel duty will be frozen for the 11thconsecutive year.

Capping the amount of SME payable R&D tax credit that a business can receive in any one year at £20,000 (plus three times the company’s total PAYE and NICs liability).

Maintaining the Lifetime Allowance for pensions at its current level of £1,073,100 until April 2026.

The adult ISA annual subscription limit for 2021-22 will remain unchanged at £20,000.

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