Budget Update

We are sure that there will be more news coming over the next few days, and we will keep you updated on developments, however, key takeaways from today’s budget are:

  • Furlough extended to the end of September. Employees will continue to receive 80% of their normal salary, however companies will have to contribute 10% in July, and 20% in August and September.
  • There will be 2 further Self-Employed Income Support Scheme (SEISS) grants. For the more recently self employed, provided your tax return was submitted by 2nd March, you will be eligible for this grant. Details are yet to be confirmed. The caveat – you will need to show that you suffered at least a 30% loss of earnings due to Covid to get the 80% payment. If your losses were below 30%, you will only get a 30% payment.
  • The Universal Credit uplift will continue for a further 6 months.
  • A “Restart” grant will be made available from April. Grants of up to £6,000 for non-essential retail, and up to £18,000 for hospitality and leisure. These grants will be administered by local councils, as with most previous grants.
  • A new “Recovery Loan Scheme”, 80% guaranteed by government, with loans from £25,000 to £10 million. Loans under £250,000 cannot require a personal guarantee, and terms will be up to six years.
  • The 100% Business rate holiday is extended until June. After this, a two thirds discount will apply for the remainder of 2021/22.
  • The 5% reduced rate VAT application for hospitality will be extended to the end of September. After this, there will be a transitional 12.5% rate for 6 months.
  • The increased stamp duty threshold will be extended to the end of June.
  • There will be no changes to the planned rates of income tax, national insurance or VAT, but after the current year, there will also be no uplift in personal allowance or the higher rate threshold, so £12,575 will be tax free, and the threshold for the higher rate will be £50,270.
  • The VAT registration threshold will be fixed for at least 2 years.
  • There are no changes to Inheritance Tax, Pensions Allowances, Capital Gains Tax, Entrepreneurs Relief or many of the other rumoured changes.
  • Corporation tax however, will be increased from April 2023 to 25%. This rate however only applies to profits over £250,000. For profits below £50,000 the rate will remain 19% as currently, and between £50,000 and £250,000 there will be a tapering rate (details unknown as yet).
  • Duties on all alcohol have been frozen.
  • Fuel duty has been frozen.
  • The launch of a new “Help to Grow” business development scheme, offering training and support. More details available at https://helptogrow.campaign.gov.uk/.
  • An increase in the offset of equipment cost, allowing a claim of 130% of the cost against tax in the first year. More details on this are awaited as to exactly how this scheme will operate.

If there is anything else you would like to know, please do get in touch!

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