The key announcements from today's Budget which will affect business owners and taxpayers, brought to you by Scholes Chartered Accountants, are summarised below.
Download a free copy of our Budget 2021 Report here.
- Coronavirus Job Retention Scheme - the "furlough scheme" is to be extended until the end of September 2021; employees will continue to receive 80% of their normal pay for hours not worked; employers will be asked to contribute 10% in July, and 20% in August and September;
- Self Employed Income Support Scheme - the scheme will be extended with fourth and fifth claims covering the periods February to April and "May onwards"; these will work on a similar basis to previous claims but the amount of each grant will depend on whether the claimant's turnover has fallen "by more than 30%"; also, recently self-employed people who had filed a Self Assessment return by midnight yesterday will now be eligible to claim the fourth and fifth instalments;
- Apprenticeships - the level of grant support provided to employers taking on new apprentices will be doubled from £1,500 to £3,000;
- National Minimum Wage increased to £8.91;
- Coronavirus Loans - a new "Recovery Loan Scheme" will replace the Bounceback and CBILS loans, lending from £25k to £10m with a government-backed guarantee to lenders covering 80%;
- Business rates - existing business rates holiday in England to be extended until the end of June 21, thereafter discounted by 2/3rds "until the end of 2021";
- Restart grants - £6k "Restart Grants" for non-essential businesses due to reopen in April - rising to £18k for hospitality & leisure businesses;
- VAT temporary reduction - the temporary 5% rate for the hospitality sector is to be extended until the end of September 2021; then increased to 12.5% for six months; then reverting to 20% from April 2022;
- Stamp Duty Land Tax - the £500k nil rate band for residential property will remain in place until 30 June 2021; then reduced to £250k until 30 September 2021; before reverting to £125k;
- Homebuyers - a new "Mortgage Guarantee Scheme" will be introduced for homebuyers "who can afford only a 5% deposit";
- Tax rates - no change to the Income Tax, NIC or VAT rates; however the Income Tax Personal Allowance of £12,570 and the Higher Rate Threshold of £50,270 will both be frozen until April 2026, creating further "fiscal drag"; no changes to Inheritance Tax or Capital Gains Tax allowances, or the Pensions Annual or Lifetime Allowances;
- Corporation Tax - the main rate to be increased to 25% from April 2023; from that date, however, there will be a reintroduction of the "small profits" rate of 19% on profits of less than £50k, with a taper applying to profits between £50k and £250k;
- Trading losses - there will be a temporary change to the rules on trading losses, enabling businesses to carry back losses of up to £2m up to three prior years;
- Business investment - a new "Super Deduction" will be available to businesses, enabling them to offset up to 130% of qualifying expenditure against income, initially for a period of two years - we will bring you more on this as soon as the details are announced!!;
- Duties - no increase in alcohol or fuel duties;
- Help to Grow - new initiatives "Help to Grow - Management" and "Help to Grow - Digital" will be rolled out to businesses, providing government-funded support with management training and investment in "productivity-enhancing software";
- Visa schemes - reforms to make it easier to attract highly skilled migrants;
- Consultations - new consultations were also announced concerning the R&D Tax Credits and Enterprise Management Incentives schemes.
Perhaps surprisingly, given the amount of speculation in recent weeks, there was no announcement at all about Capital Gains Tax or Inheritance Tax.
We will publish further details on the main points as they emerge. In the meantime, read more about our services for small businesses here.