Budget 2021

This afternoon The Chancellor, Rishi Sunak announced his economic plan to help the UK's recovery from Covid-19. We wanted to bring to your attention the following updates:

Protecting jobs and livelihoods

Furlough Scheme Extension to September 2021
The Coronavirus Job Support Scheme setup to help maintain your workforce if you have been directly affected by the Coronavirus has been extended to 30th September 2021. From now until 30th June 2021, there will be no changes to the scheme with HMRC continuing to pay 80% of employee's wages for hours not worked. As businesses start to reopen, employers will be required to cover 10% of wages for hours not worked in July and 20% in August and September along with Employers National Insurance and Pension Contributions. 

SEISS (Self-Employed Income Support Scheme
Due to the continued impact Covid-19 is having on Self-Employed individuals, the SEISS scheme will continue with a fourth and fifth grant. It was announced that a further 600,000 who filed a 2019/20 tax return will now be able to claim for the first time. 

Stamp Duty Holiday Extension
The stamp duty holiday announced last year has been extended to 30th June 2021. This means that buyers in England and Northern Ireland do not pay stamp duty on the first £500,000. Following this to the 30th September 2021, the nil rate band will be double the standard level at £250,000. From 1st October 2021 rates are set to resume to the usual level. 

VAT - Hospitality, Accommodation and Attractions
The temporary VAT reduced rate (5%) for Hospitality, Accommodation and Attractions in the UK has been extended to 30th September 2021. Followed by a rate of 12.5% for a further six months to 31st March 2022.

Strengthening the public finances

Personal Tax
The Personal Tax Allowance for 2021/22 has been set at £12,570 with the Basic Rate Band increasing to £37,700. These rates are set to remain until April 2026.

Corporation Tax
From April 2023 the rate of Corporation Tax will increase to 25% for businesses with profits greater than £250,000. Businesses with profits less than £50,000 or less will continue to be taxed at 19% with a taper being introduced for profits between £50,000 and £250,000.

Research and Development Tax Credits 
From April 2021, the amount of SME payable tax credit that a business can receive in any one year is being capped at £20,000 (plus three times the company's total PAYE and NICs liability).

Future Investment

'Super-deduction' available for investment in new equipment

Companies investing in qualifying new plant and machinery assets will benefit from a 130% first year allowance. The new form of relief will be available for two years and is set to end on 31st March 2023.

Review of Research and Development Tax Relief
A review will be launched into Research and Development tax relief to make sure the UK remains a competitive location for cutting-edge research. 

Future Fund: Breakthrough
A new 'Future Fund: Breakthrough' will invest in highly innovative companies such as those working in life sciences, quantum computing, or clean tech, that are aiming to raise at least £20 million. 

If you have any queries with any of the points above, please contact your dedicated accountant.