UK Budget 2021: The Key Points

Today, Chancellor Rishi Sunak announced the 2021 Budget, laying out plans on how the country will recover from the economic effects of coronavirus.

Sunak’s plans detailed how a further £65 billion worth of support will be introduced, as well as several other announcements that will affect businesses, the self-employed and working families. Here is a breakdown of everything you need to know.

Further COVID-19 support

The chancellor delivered some key points surrounding support following coronavirus:

  • Furlough will be further extended up until September 2021. The Government will continue to pay 80% of employees’ wages for hours that they cannot work. Employers will be asked to contribute 10% in July and 20% in August.
  • The self-employed will receive further help as it was announced that the Self-Employment Income Support Scheme will be extended up until September 2021, covering 80% of average trading profits up to £7,500. These schemes will also become more accessible as the access to the grant is widened: if you filed a tax return for the 2019-20 tax year, you will now be eligible to claim for the first time.
  • The £20 uplift in Universal Credit will be extended for another six months. A one-off payment of £500 will be available to eligible Working Tax Credit claimants.

 

Help for businesses

There have been several new plans announced to help businesses:

  • From April 2021, businesses will be able to claim a new Restart Grant to help them open following the coronavirus pandemic. These are a one-off cash grant of up to £18,000 for hospitality, accommodation, leisure, personal care and gym businesses. Retail businesses could claim up to £6,000.
  • A new Recovery Loan Scheme was announced, meaning that businesses of any size could get a loan of between £25,001 and £10 million to help businesses through the next stage of recovery.
  • The apprentice hiring incentive has now doubled meaning businesses will now receive a payment of £3,000 if employers hire a new apprentice between 1st April 2021 and 30th September 2021.
  • An additional £300 million in support will be provided to the arts to support theatres, museums and other cultural organisations.
  • The 100% business rates holiday will continue until June and then will be cut by two-thirds for the remainder of the year.
  • A Help to Grow business scheme had been announced to provide free training and discounts on productivity software to help businesses grow – you can apply for the Help to Grow scheme here.
  • All small to medium-sized businesses will be able to continue to claim up to two weeks of eligible Statutory Sick Pay costs per employee from the government.
  • Businesses will be able to carry back losses of up to £2 million for up to 3 years to support cashflow.

 

Taxation

  • The VAT cut for the hospitality sector will stay at 5% until 30th September, at which point it will then change to 12.5% for 6 months until April 2022.
  • Alcohol and fuel duty had been frozen.
  • Corporation Tax will increase to 25% in 2023. Businesses with a trading profit of £50,000 or less will be taxed at 19%. Businesses with profits greater than £250,000 will be taxed at 25%.
  • A new super-deduction will be introduced which will cut companies tax bills by 25p for every pound they invest in new equipment.

 

Housing

  • The Chancellor announced that 95% mortgages will return meaning first-time buyers have the option to buy a home worth up to £600,000 with a 5% deposit
  • The temporary cut in residential Stamp Duty Land Tax (NIL to £500,000) has been extended to 30th June 2021. From 1st July to 30th September 2021, the NIL rate band will be reduced to £250,000 before going back to £125,000 as from 1st October 2021.

 

National Living Wage & personal tax threshold

  • The National Living Wage will increase to £8.91 as of April 2021.
  • The personal tax threshold will freeze at £12,500 up until April 2022, after which point it will increase to £12,570 and then freeze again until April 2026.
  • The higher rate income tax threshold will be frozen at £50,270 from April 2022 to 2026.

 

If you need further advice following the proposed changes announced by Rishi Sunak, you can contact our team today and we will be more than happy to answer any queries you may have.

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The Winter Economy Plan: The Key Points

On the 24th September 2020, Rishi Sunak announced several new schemes to support businesses and workers across the UK as part of his Winter Economy Plan. 

Over the course of this post, we’ll take a close look at the details of each of the new schemes, but we’ve also provided a brief rundown of the main highlights below.

New government grant for small businesses: The Small Business Grant Fund (SBGF)

Yesterday the Minister for Regional Growth and Local Government announced that there would be £20 million in new funding to help businesses across England get back on track due to COVID-19.

Small to medium-sized business in England can receive the Small Business Grant Fund (SBGF) of between £1000-£5000 to be spent on professional services fees to help get business back on track.

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Coronavirus Job Retention Scheme Update

On the 29th May 2020, the Chancellor announced more details about the Coronavirus Job Retention Scheme (also referred to as the furlough scheme). This post outlines the changes that will be put into place starting from the 1st July 2020, as well as further changes that are planned for the coming months.

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HMRC Self-Employment Income Support Opens on 13th May

The Self-Employment Income Support Scheme (SEISS) opens on the 13th of May 2020. This new scheme is designed to provide income support for self-employed workers who have been adversely affected by the coronavirus (COVID-19) outbreak. Read on to find out if you’re eligible, how much you could claim, and how to apply.

Coronavirus: Support For The Self-Employed

The outbreak of coronavirus COVID 19 is having a significant impact on self-employed people across Derby, Nottingham and the wider United Kingdom.

The UK Government has announced some measures to support the self-employed at this time. You can find a list of support that is currently available below, with links to official government resources.