Budget 2021

by | Mar 4, 2021 | Uncategorized

The Budget – March 2021

Following an unprecedented year of furlough and lockdowns, at AJ Accountancy we were eager to hear what the Chancellor of the Exchequer, Rishi Sunak had to say when he delivered his second budget on Wednesday 3rd March 2021.

Coronavirus Response;

  • Extension of the furlough scheme until September with the employee continuing to receive 80%. An increase in employer contributions will be phased with a 10% contribution in July and August and a 20% contribution in September.
  • The Self-employment Income Support Scheme (SEIS) is set to be extended until September with the fourth and fifth grants, the fifth grant covering the period between the period May to September. From July, if your turnover has reduced by 30% or more, the full 80% grant can be claimed. If however your turnover has reduced by less than 30%, a 30% grant can be claimed. Good news for newly registered business who filed a 2019-20 self-assessment tax return as they will also qualify for these grants.
  • Universal Credit will continue to receive the £20 weekly uplift
  • The National Living Wage will increase to £8.91 from 1st April 2021.
  • Re-start grants from April with gyms and hospitality qualifying for up to £18,000 and £6,000 for non-essential shops.
  • Business rates holiday to continue for three months with a two-thirds discount imposed on the remaining nine months
  • VAT for hospitality to remain at 5% for a further 6 months with a phased return to the full 20% in April 2022, imposing a 12.5% VAT rate for the interim months.
  • Stamp duty nil rate band to remain until the end of June on houses up to the value of £500,000.
  • Mortgage guarantee introduced for those with a 5% deposit. The government will guarantee the remaining 95% of the loan.

Tax News;

  • No increase in NIC, VAT or Income tax
  • Personal allowance threshold frozen at £12,570 and basic rate bracket at £50,270 (increased from tax year 2021-21) for tax year 2021-22 and remain until 2026.
  • Inheritance tax, Pensions allowance, Capital gains tax and VAT registration threshold maintain their current thresholds
  • Corporation tax rises to 25% from April 2023 in a tapered effect for those with a profit between £50,000 and £250,000. For those with a profit below £50,000 the rate remains at 19%
  • Corporation tax losses up to £2,000,000 can be carried back up to 3 years.
  • Super deductions tax relief for business investment up to 130%
  • Planned increases in alcohol and fuel taxes abolished.