We’ve prepared this brief summary of the 2021 Budget with only the stuff we hope will be of interest to clients of our firm – small businesses and individuals.
1. COVID-19 Related: Furlough will continue until the end of September 2021, with employers required to contribute 10% of pay in July, and 20% in August and September.
2. COVID-19 Related: A further two Self Employed Income Support Scheme (SEISS) grants will be paid – and will now include the 2019/20 tax year, as long as a tax return for that year was submitted by 2 March. The second (fifth overall) grant will be the first to be paid in proportion to the reduction in self employed income – full grant only payable if turnover has fallen by 30% or more.
3. COVID-19 Related: Retail, leisure and hospitality businesses 100% rates relief to continue until 30 June 2021.
4. COVID-19 Related: Bounce Back Loans and CBILS being replaced by a ‘Recovery Loan Scheme’ with 80% Government backed loans of between £25k and £10M. Details awaited.
5. Income tax rates in Scotland are already set but the UK Personal Allowance will increase to £12,570 – and then remain at that level until 2026.
6. The rate of Corporation Tax will remain at 19% for all companies until 2023, at which point it will become graduated:
– Profits up to £50,000 – 19%
– Profits over £250,000 – 25%
– Profits between £50k and £250k – tapered rate
7. Qualifying plant and machinery spend will attract a ‘super deduction’ (first year allowance) of 130% of the cost against profits to encourage investment. Available between 1 April 2021 and 31 March 2023.
8. Apprenticeship incentive payments to employers increasing to £3,000 per new hire until September 2021
9. Reduced rate of 5% VAT for hospitality, accommodation and attractions to continue to 30 September 2021, then 12.5% from October 2021 to March 2022.
Also on VAT – payments deferred from last year (period to June 2020) can now be spread over 11 months from March 2021 rather than as a single payment.
10. Contactless payment limit being increased to £100 per transaction
The usual disclaimer – a guide like this shouldn’t be used as formal tax advice and is summarised so as to communicate basic points quickly.
If you have any questions, please contact David and the team.