Chancellor Rishi Sunak has announced a new £65bn budget in the House of Commons on 3rd March 2021. Measures are set out to help business and jobs through the end of the pandemic, supporting a long-term economic recovery.

  • Minimum wage to increase to £8.91 an hour from April for people aged 23 and over, The National Living Wage will rise to £8.91.
  • The Personal Allowance will increase to £12,570 and Basic rate limit to £37,700, tax rate of 20% for 2021 to 2022. The higher rate threshold of 40% will increase to £50,270. These thresholds will then remain frozen until 05/04/2026.
  • Coronavirus Job Retention Scheme (CJRS) has been extended to 30/09/2021. From July 2021, employers will need to contribute towards the cost of unworked hours:
    • Until 30/06/2021                      0%
    • 01/07/2021 – 31/07/2021        10%
    • 01/08/2021 – 30/09/2021        20%
  • Rates of income tax, national insurance, VAT or Capital gains tax annual exemptions remain unchanged.
  • Self-Employment Income Support Scheme (SEISS) have been announced:
    • The Fourth grant – 80% of three months’ average trading profits, paid out in a single instalment and capped at £7,500. The grant will cover the period February to April and can be claimed from late April. Self-employed individuals must have filed a 2019-20 Self-Assessment by 02/03/2021.
    • The Fifth grant – 80% of three months’ average trading profits if turnover has fallen by 30% or more, paid out in a single instalment and capped at £7,500. If turnover has fallen by less than 30% , the grant is 30% of eligible profits capped at £2,850. The grant will cover the period May to September and can be claimed from late July. Self-employed individuals must have filed a 2019-20 Self-Assessment by 02/03/2021.
  • Universal Credit £20 uplift a week to be extended for another six months.
  • Working Tax Credit claimants will get £500 one-off payment.
  • Corporation Tax will continue to be charged at 19% until 31/03/2023 for profits up to £50,000. There will be tapering for profits between £50,000 and £250,000 to be announced.
  • Trading losses arising in tax years 2020/2021 and 2021/2022 for up to £2,000,000 can be carried back for three years. There are some exceptions to be published.
  • The reduced rate of VAT of 5% for hospitality, holiday accommodation, and attractions is extended to 30/09/2021 after which the rate will increase to 12.5% until 31/03/2022.
  • Business rates reliefs eligible retail, hospitality and leisure properties will continue to get 100% business rates relief from 1 April 2021 to 30 June 2021 and 66% business rates relief for the period from 1 July 2021 to 31 March 2022, capped at £2 million per business for properties that were required to be closed on 5 January 2021, or £105,000 per business for other eligible properties. Nurseries will also qualify for relief in the same way as other eligible properties.
  • Recovery Loan Scheme From 6 April 2021 this scheme provide lenders with a guarantee of 80% on eligible loans between £25,000 and £10 million. The scheme will be open to all businesses. This replaces the CBILS and Bounce Back Loan schemes.
  • Restart Grants of up to £6,000 per premises for non-essential retail businesses. £18,000 per premises for hospitality, accommodation, leisure, personal care and gym businesses.
  • Super-deduction and 50% first-year allowances for companies investing in qualifying new plant and machinery will be able to claim a 130% super-deduction, and special rate assets will attract a 50% first-year allowance between 01/04/2021 and 31/03/2023.
  • Alcohol, tobacco and fuel duties to be frozen. No extra duties on spirits, wine, cider or beer Fuel duty for eleventh consecutive year.
  • Stamp duty nil rate band until the end of June on houses up to the value of £500,000.
  • SDLT temporary rates of £500,000 nil-rate band will remain in place until 30/06/2021, it then will reduce to £250,000 and to £125,000 from 01/10/2021.
  • Mortgage guarantee introduced for those first time buyers with a 5% deposit. The government will guarantee the remaining 95% of the loan.

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