BUDGET MATTERS

Earlier this week chancellor Rishi Sunak delivered the Government’s plans for the upcoming financial year with the 2021 Budget. After an extraordinary previous 12 months this was always going to be a Budget that was closely scrutinised by households and businesses alike. With the latter in mind, we thought it would be useful to outline the key ‘take-aways’ that may help you in the coming weeks and months. If you have any enquiries or questions relating to the points listed below, please feel free to get in touch with us at Black Type Accountancy Ltd.

*An extension of the Coronavirus Job Support Scheme until the end of September 2021. The Government will continue to pay 80% of employees’ wages for hours they cannot work until the end of June, when employers will then be asked to contribute 10% of the furlough amount during July, raising to 20% in August and September.

*An extension of the Self-Employed Income Support Scheme until the end of September 2021. All workers who registered as self-employed during the 2019/20 tax year and who filed their tax returns by midnight on March 2 will be able to register a claim for a fourth and fifth grant. This is also open to those who became self-employed in the 2019-20 tax year, meaning some people will be eligible even if they were not for the three previous grants.

*An extension to the temporary cut in Stamp Duty Land Tax until June 30 for all property purchases up to £500k. After this date, all property purchases up to £250k will be exempt from Stamp Duty until September 30 when it will then revert to the pre-pandemic rate of £125k exemption.

*A new mortgage guarantee scheme will enable all UK homebuyers to secure a mortgage of up to £600,000.00 with a 5% deposit.

*A new ‘Recovery Loan Scheme’ to make available loans of between £25,001.00 and £10 million. This has been designed to help businesses of all sizes through the next stage of the recovery. This measure replaces the Bounce Back and other Coronavirus business loan schemes which are being phased out.

*A six-month extension of the £20.00 per week ‘Universal Credit’ uplift. There will also be a one-off payment of £500.00 to eligible ‘Working Tax Credit’ claimants.

*The minimum wage is increased to £8.91 from April 2021.

*An extension to the 5% VAT rate cut for hospitality, accommodation and tourist attractions across the UK, until September 30. This will be followed by a 12.5% VAT rate for a further six months, until March 31, 2022.

*Business rates’ relief extended for businesses in the retail, hospitality and leisure sectors.

*Small and medium-sized employers will be able to continue to be able to reclaim up to two weeks of eligible Statutory Sick Pay (SSP) cost from the Government.

*The 2021/2022 income tax personal allowance of £12,570.00 and higher rate threshold of £50,270.00 will be maintained from April 6, 2021 until April 5, 2026.

*The main rate of Corporation Tax will increase to 25%. This increase will not take place until 2023. However, businesses with profits of £50,000.00 or less will continue to be taxed at 19% and a taper above £50,000.00 will be introduced so that only businesses with profits greater than £250,000.00 will be taxed at the full 25% rate.

*Inheritance Tax, Fuel Excise Duty, Alcohol Duties, ISA subscription limits and the VAT registration and deregistration limits remain unchanged.

*From April 2021, the new super deduction will cut companies tax bills by £0.25p, for every pound they invest in new equipment.

*The limit on a single payment using contactless card technology will increase to £100.00 later this year, from its current limit of £45.00.

There is a lot to absorb from Budget 2021 and it may be that this is a blog you want to read a couple of times over the next few days to pick out the points that are relevant to you. And, please remember, we’re here to help with any questions you may have about Budget 2021.