Today Rishi Sunak delivered his Budget.  The majority of the announcements in the speech related to ongoing Covid-19 support and were focused on short-term support for people’s jobs and finances. We highlight below some of the more pertinent points announced which we believe will be of interest to you.

• An extension of the Coronavirus Job Support Scheme to September 2021 across the UK.  Employers will be expected to pay 10% towards the hours their staff do not work in July, increasing to 20% in August and September.
• 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 apprenticeship hiring incentive in England to September 2021 and an increase of payment to £3,000.

 

• An extension of the UK-wide Self Employment Income Support scheme to September 2021, with 600,000 more people who filed a tax return in 2019-20 now able to claim for the first time.

 

• £5 billion for new Restart Grants – a one off cash grant of up to £18,000 for hospitality, accommodation, leisure, personal care and gym businesses in England.
• Extension to the VAT cut to 5% for hospitality, accommodation and attractions across the UK until the end of September, 
• This will then be followed by a 12.5% rate for a further six months until 31 March 2022.
• 750,000 eligible businesses in the retail, hospitality and leisure sectors in England will benefit from business rates relief.

 

• 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.
• To further support the cashflow of businesses, the government is extending the loss carry back rules worth up to £760,000 per company.

 

• An extension to the temporary cut in Stamp Duty Land Tax in England and Northern Ireland until September will support the housing market and protect and create jobs.
• A new mortgage guarantee scheme will enable all UK homebuyers secure a mortgage up to £600,000 with a 5% deposit.

 

 

• Personal income tax thresholds will be frozen from next year (April 2022) until April 2026 at £12,570 for the basic rate and £50,270 for the higher rate.
• Capital gains tax annual exemption frozen at £12,300 until April 2026. 

 

• The rate of Corporation Tax will increase to 25% (currently 19%). 
• The increase will not take effect until 2023. 
• Businesses with profits of £50,000 or less, will continue to be taxed at 19%
• A taper above £50,000 will be introduced so that only businesses with profits greater than £250,000 will be taxed at the full 25% rate.
• In April 2021, a “super-deduction” to incentivise business investment will mean businesses can reduce their taxable income by 130% of the amount they invest in new equipment. The super deduction will be in full effect over a two-year period.
• Research & Development - 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).

 

• INHERITANCE TAX (IHT) - Maintaining inheritance tax thresholds at their current levels until April 2026.

• PENSIONS - Maintaining the Lifetime Allowance at its current level of £1,073,100 until April 2026.

 

• The National Living Wage will rise to £8.91 from April, from £8.72.
• £20 uplift in Universal Credit worth £1,000 a year to be extended for another six months
• £100 million for a new Taxpayer Protection Taskforce to crack-down on COVID fraudsters who have exploited UK Government support schemes.

As we have always maintained, with all matters referred to in the Chancellors announcements the “devil will be in the detail” and the full impact and understanding of all the announcements will not be made clear until the full parliamentary process has been undertaken and the proposals become law in the relevant finance act. We will issue further notices should any matters of significance be announced. 

Last modified on Wednesday, 03 March 2021