On Wednesday Rishi Sunak released the Spring 2021 Budget, which provided further Coronavirus financial support for individuals and businesses. We have summarised key points from the 2021 budget, however we will continue to follow with more detailed updates for business support as further information is released.

Coronavirus Financial Support

  • Coronavirus Job Retention Scheme has been extended to September 2021. The government will continue to pay 80% of employees’ wages until the end of June 2021.
    For periods in July, grants will cover 70% of employees’ wages for the hours not worked, up to a cap of £2,187.50. In August and September, this will then reduce to 60% of employees’ wages up to £1,875.
  • Self Employment Income Support scheme has been extended to September 2021 and the fourth and fifth grant will now take into consideration the 2019-20 tax return.
    The fourth grant application is expected to open late April 2021 and you will have until 31st May 2021 to apply.
  • Stamp Duty Tax extension until September 2021.
    The NIL rate band will continue to remain at £500,000 until 30th June 2021. From 1st July 2021 – 30th September 2021 the NIL rate band will then reduce to £250,000, returning to the original NIL rate band on 1st October 2021 of £125,000.
  • Two new restart grants which will aim to support businesses as they are re-opening.
    Up to £6,000 will be available for non-essential retail and up to £18,000 will be available for leisure, accommodation, hospitality, personal care and gym businesses in England.
  • Business rates holiday has been extended until June 2021, this will be automatically applied to eligible businesses.
    This will then be tapered to cover 2/3 of business rates for the rest of the financial year.
  • Extension to the VAT cut to 5% for hospitality, accommodation and attractions across the UK until the end of September, followed by a 12.5% rate for a further six months until 31 March 2022.
  • Extension of the apprenticeship hiring incentive in England to September 2021 and an increase of payment to £3,000.
  • A new UK-wide Recovery Loan Scheme to make available loans between £25,001 and £10 million, and asset and invoice finance between £1,000 and £10 million, to help businesses of all sizes through the next stage of recovery.
  • Six-month extension of the £20 per week Universal Credit uplift. A one-off payment of £500 to eligible Working Tax Credit claimants across the UK.
  • Small and medium-sized employers in the UK will continue to be able to reclaim up to two weeks of eligible Statutory Sick Pay (SSP) costs per employee from the Government.
  • Extension of the Film & TV Production Restart scheme in the UK, with an additional £300 million to support theatres, museums and other cultural organisations in England through the Culture Recovery Fund.
  • A new mortgage guarantee scheme will enable all UK homebuyers secure a mortgage up to £600,000 with a 5% deposit.

Tax Changes

  • Maintaining the income tax Personal Allowance and higher rate threshold from April 2022 until April 2026.
  • The inheritance tax thresholds, the pensions Lifetime Allowance and the Annual Exempt Amount for Capital Gains Tax will be maintained at their existing levels until April 2026.
  • National Living Wage will increase by 2.2 per cent from £8.72 to £8.91.
  • The rate of Corporation Tax will increase from April 2023 to 25% on profits over £250,000. The rate for small profits under £50,000 will remain at 19% and there will be relief for businesses with profits under £250,000 so that they pay less than the main rate.
  • Capping the amount of SME payable R&D tax credit that a business can receive in any one year at £20,000 (plus three times the company’s total PAYE and NICs liability).
  • Super-deduction – From 1 April 2021 until 31 March 2023, companies investing in qualifying new plant and machinery assets will benefit from a 130% first-year capital allowance. This upfront super-deduction will allow companies to cut their tax bill by up to 25p for every £1 they invest, ensuring the UK capital allowances regime is amongst the world’s most competitive. Investing companies will also benefit from a 50% first-year allowance for qualifying special rate (including long life) assets.

Please click here for the full 2021 budget document produced by HMRC. We will continue to provide information as HMRC update us on the Coronavirus Financial Support schemes available to you and your business.