Brief Budget Highlights 3rd March 2021
Companies:
Corporation Tax:
- Small businesses with profits of £50k or less will continue to pay 19%
- For businesses with profits between £50k and £250K, there will be a sliding scale.
- Businesses with profits 250K and above will pay 25% from 2023. However, these companies can reduce the corporation tax bills by investing in property, plant and equipment for the next two years, referred to as a Super Deduction.
Corporation Tax treatment of losses will allow a business to carry back losses for 3 years up to 2 million.
Living Wage:
rises to £8.91 from April 2021.
Furlough Scheme:
The scheme extended till the end of September 2021 for employees. There will be no change as business reopen; they will be asked to contribute to paying employees' costs; nothing will change until July 2021, when the government will ask for a small contribution of just 10% and 20% in August September.
Help to grow schemes:
Register your interest Help to Grow Management and Help to Grow Digital. Grants are available; please go to
https//helptogrow.campaign.gov.uk
Vat:
Hospitality Vat of 5% will continue to the 30th September 2021 after that, there will be an interim rate of 12% for six months and will not return to 20% till April 2022.
The vat Threshold of £85k will remain till April 2020
Self Employed
SEISS grants will continue until September 2021. The 4th Grant is covering the period Feb 2021 to April 2021 and a 5th and final grant from May 2021 onwards.
The 4th Grant will provide 3 months of support at 80% of average trading profits.
The 5th Grant will provide 3 months of average profits with a system open for claims in late July 2021.
Newly self-employed:
If they have filed a tax return by midnight 2nd March 2021 for the tax return, 2019/20 can now claim the 4th and 5th Grant.
Personal Tax
No increases in PAYE Tax, NI or Vat
There will be an increase in your tax in the long term as the government puts the following in place.
- Tax-Free Allowance of £12,500 6th April 2020 to 5th April 2021
- Tax-Free Allowance of £12,570 6th April 2021 to 5th April 2022
- From 6th April 2022, this tax-free allowance will be frozen to April 2026
Universal Credit £20 a week boost will continue for another six months.
Other Taxes and News
New HMRC Taskforce:
The government will be attacking Fraud for the covid scheme with a 100 million pound with a new HMRC Task-force with 1000 investigators. Further investment and changes in HMRC are coming to clamp down on Fraud and invasion.
New Recovery Loan Scheme:
The new loan replaces the Bounce Bank Loan and the CBILS. The new recovery loan scheme will offer loans from £25k to £10m up to the end of the year, with the government providing lenders with an 80% guarantee.
Home Buyers:
Guarantee Scheme to offer 95% loans to first time buyers. A new scheme to allow people to get on the property ladder with a 5% deposit. The new policy will give those who do not have large amounts of money and the opportunity to move from renting to buying a government guarantee scheme.
Duties:
There is no increase in Duty on fuel and alcohol.
Savings:
Green Bond is a new type of account that will allow UK Savers to use their savings to help environmentally - focused projects get off the ground. The bond will be through the National Savings and Investments NS & I during the summer of 2021.
