Chancellor Rishi Sunak announced the 2021 Budget to investigate economic hardships caused by the COVID-19 pandemic. The budget aims to protect businesses, restore public finances and begin building the future economy. Here we highlight some of the most notable additions to the budget, and we refer you to the free Spring Budget report made by GCSD Accountants for a complete overview of the latest announcements and measures.
The Universal Credit Standard Allowance
The Universal Credit standard allowance was increased by £20 per week shortly after the 2020 budget release, and this has been extended for a further six months. Additionally, a one-off payment of £500 will be made to eligible Working Tax Credit claimants to provide extra support.
A new mortgage scheme to be introduced in April 2021 will allow buyers to fix their initial mortgage rate for at least five years. This is designed to increase the availability of mortgages on new or existing properties.
Continued Job Retention
The current coronavirus job retention scheme has been extended until 30th September 2021, allowing employers to continue claiming 80% of ‘usual salary’ for employees on leave. The level of grant available will remain the same until 30th June 2021, and for July, the rate will be reduced to 70% of furloughed wages and 60% for August and September.
Training and Work Placement
The government will provide an additional £126 million for work placements and training for 16-24 year-olds. Payments made to employers who hire new apprentices will be extended and increased to £3000 per new hire (double the rate under the previous scheme).
The government is continuing to set up Freeports across the UK, within which duties will be deferred
Business and Trade
The Self-Employment Income Support Scheme has been further extended, allowing 80% of three month’s average trading to be claimed from April 2021. To support businesses reopening, £5 billion will be available in restart grants, focusing on the leisure and hospitality sector. These sectors will also pay no business rates for the next 3 months and receive discounting months for 9 months. However, corporation taxes will be increased to 25% in April 2023 for companies profiting over £250,000, but the Small Profits Rate will remain at 19% for companies with profits of £50,000 or less.
Trade loss carryback will be extended from one year to three years, with a maximum of £2 million unused losses available for carryback. No changes to the current Capital Gains Tax have been announced. The government is continuing to set up Freeports across the UK, within which duties will be deferred. Simultaneously, goods remain on-site, import procedures will be simplified, and some customs duties may be exempted. These will provide enhanced tax relief in some locations.
Check out the full report
Read the full Spring Budget report made by GCSD Accountants for a complete overview of the latest announcements and measures most likely to affect you or your business. You’ll find the report here.