The awaited budget has finally arrived, and I am sure we were all waiting with bated breath to see what the Chancellor would announce. With Covid-19, still very much still sitting as a heavy weight on all our shoulders, the Chancellor has announced his budget in light of the ongoing situation.
We have highlighted the key points to note from his budget.
Self-Employment Income Support Scheme (SEISS)
The scheme has been expanded again and will now allow those newly self-employed to be eligible for the grant as long as they have filed their 2019/2020 income tax return by Midnight on 2nd March 2021. This will allow up to 600,000 more people to claim for the first time. The 4th grant will cover February to April 2021 and can be claimed from late April. The grant will be worth 80% of 3 months’ average trading profits and capped at £7,500. This will be paid in one single instalment. The 5th grant will be available from late July 2021 covering May to September 2021. The grant value will be determined by a turnover test. If the sole trader’s turnover has fallen by 30% or more, they will receive the full grant worth 80% of 3 month’s average trading profits, capped at £7,500. If turnover has fallen less than 30%, the grant worth will be capped at £2,850 and worked out at 30% of average trading profits.
Coronavirus Job Retention Scheme
The furlough scheme will be extended until September 2021 and employees will still be eligible to obtain 80% of their wages for the hours they cannot work. The changes noted to the furlough scheme is that from July 2021, employers will be asked to pay 10% towards the scheme and from August and September 2021, employers will be asked to pay 20% towards the scheme.
Statutory Sick Pay
Small and medium sized employers will continue to be able to reclaim up to two weeks of eligible Statutory Sick Pay (SSP) costs per employee from the Government.
From April 2023, the rate of corporation tax will increase to 25% on profits over £250,000. Corporation tax will remain at 19% for those businesses with small profits under £50,000 and there will be relief for those businesses whose profits who are under £250,000 so they are not charged at the main rate.
From April 2021, the income tax personal allowance will rise to £12,570 (1257L) and will be unchanged until April 2026.
National Insurance Contributions
The Primary Threshold will increase to £9,568 and the Upper Earnings Limit will increase to £50,270. The Upper Earnings Limit will remain until April 2026.
Capital Gains Tax
The Annual Exempt Amount will be maintained at the current level of £12,300 for individuals and £6,150 for trusts until April 2026.
The inheritance tax nil rate bands will remain at current levels until April 2026.
VAT Reduction for Tourism and Hospitality Sector
The temporary reduced rate of 5% for goods and services will be extended until 30th September 2021. Thereafter from 1st October – 31st March 2022, a rate of 12.5% will apply to help transition back to 20% rate.
VAT Deferral Payments
The VAT payments deferred from March 2020 – June 2020 can now opt to use the new payment scheme to pay the deferred VAT. Businesses can opt to pay up to 11 equal payments from March 2021 instead of one lump sum as originally planned.
An extension to the temporary cut in Stamp Duty Land Tax in England Northern Ireland until September 2021 will support the housing market and protect and create jobs.
Mortgage Guarantee Scheme
A new mortgage guarantee scheme will enable all UK homebuyers secure a mortgage up to £600,000 with a 5% deposit.
Recovery Loan Scheme
To increase confidence for lenders providing finance to UK businesses, the Recovery Loan Scheme will provide lenders from April 2021 with a guarantee of 80% on eligible loans between £25,000 and £10 million. This scheme will be available to all businesses.
The legal limit for single contactless payments will be upped from £45 to £100.
If you need services or just want to chat about any of the changes please contact us at firstname.lastname@example.org .