Budget 3rd March 2021
The Chancellors Budget announcement yesterday has confirmed that some of the current COVID-19 business help schemes will be extended. It also announced new schemes and restart grants that will help to kickstart the economy as we take the long road out of lockdown.
Firstly, the Budget announced that the furlough scheme is being extended until the end of September 2021.
- The Eligibility will not change.
- The government will contribute 80% of hours not worked until 30th June 2021.
- The government will contribute 70% and the employer 10% in July.
- The government will contribute 60% and the employer 20% in August and September.
Self Employed Income Support Scheme
Those who have submitted a Self-Assessment by midnight on 2nd March 2021 will be eligible for the 4th and 5th grants. Meaning around 600,000 more Self-employed people will now be eligible.
- The 4th Grant will cover until the end of April at 80%
- The 5th grant will cover May – July 2021 – the amount to be received will depend on the level your turnover has dropped.
- If your turnover has fallen by 30% or more, you will continue to receive 80%
- If your turnover has fallen by less than 30%, then you will receive less.
National Minimum Wage
From April 2021, the National Minimum Wage will increase to £8.91.
The Income Tax threshold will be raised to £12,750 in April 2021 as planned, but will remain at this level until April 2026.
The Budget also announced that a new Recovery Loan Scheme will be introduced.
Any size business can apply for a loan of £25k-£10m to the end of the year. The Government has guaranteed 80% of the loan to the lenders.
The Business rate holiday will continue at 100% for the first 3 months of the tax year, to June 2021. For the remaining 9 months of the tax year (July-March), two thirds of business rates will be covered.
The Government is providing grants to businesses to help them restart when they are allowed to open through the roadmap.
- For non-essential shops they can apply for a grant up to £6,000 per premises.
- For gyms, hospitality, hotels, and other leisure firms on the 12th of April, will be able to claim a grant of up to £18k.
- £700 million is being put towards the arts, culture and sports sectors.
- £500 million is being put towards the Film industry.
The reduced VAT rate of 5% for the hospitality and tourism industries will be extended by 6 months until the 30th September 2021.
The following 6 months will have a reduced rate to an interim amount of 12.5%.
The plan is to return to the full 20% by April 2022.
The Stamp duty £500,000 nil rate band will be extended until 30th June 2021.
The NIL rate band will then reduce to double the standard level until 30th September 2021.
It is expected that the stamp duty will return to it’s normal, pre-COVID levels from the 1st October 2021.
The government want to turn this generation from one that rents to one that buys. TO do so, they have introduced a 5% deposit. A mortgage guarantee is being implemented by the government to the lenders. This scheme is available next year.
There will be no rise in CT until 2023! This is a surprise that the Budget threw at us. Everyone expected a rise, but the Chancellor has listened to his advisers that now is not the time to increase taxes. This will come later, giving people and businesses more money to get spending as the country reopens.
The rise will be to 25%, up from 19%. However, this is dependent on the profits of the businesses. A taper is being introduced from £50k. Only businesses with profits of more than £250,000 and above will pay the 25%. Those smaller businesses with less profits may be eligible to continue paying the CT at 19%.