Budget Speech 2021
In addition to the furlough scheme announcements, the chancellor Rishi Sunak also announced the following measures which we have summarised briefly.
Business grants
There will be a new Restart Grant available in April, to help businesses reopen and get going again. Non-essential retail businesses will receive grants of up to £6,000 per premises.
Hospitality and leisure businesses, including personal care and gyms, will open later, or be more impacted by restrictions when they do, so will receive grants of up to £18,000.
New Recovery Loan Scheme
Bounce Back Loan and CBIL programmes come to an end but a new recovery loan scheme has been announced.
Businesses of any size can apply for loans from £25,000 up to £10 million, through to the end of this year, with the government providing a guarantee to lenders of 80%.
Business Rates Holiday
The 100% business rates holiday continues until the end of June.
Reduced VAT rate for hospitality sector to continue
The 5% reduced rate of VAT will be extended for six months to 30th September, with an interim rate of 12.5%, with 20% applicable after April 2022.
Corporation Tax
Corporation Tax will increase to 25% in 2023 - it will be tapered above £50,000, so that only businesses with profits of a quarter of a million or greater will be taxed at the full 25% rate
Small Profits Rate: Small businesses with profits of £50,000 or less will be taxed at 19%.
a taper above £50,000, so that only businesses with profits of a quarter of a million or greater will be taxed at the full 25% rate.
New temporary tax reliefs on qualifying capital asset investments
For qualifying expenditures incurred from 1 April 2021 up to and including 31 March 2023, companies can claim in the period of investment:
● a super-deduction providing allowances of 130% on most new plant and machinery investments that ordinarily qualify for 18% main rate writing down allowances
● a first year allowance of 50% on most new plant and machinery investments that ordinarily qualify for 6% special rate writing down allowances
Temporary extension to carry back of trading losses for Corporation Tax and Income Tax
Businesses will be able to carry back losses of up to £2 million for three years providing a significant cash flow benefit and claim additional tax refunds of up to £760,000.
Help to Grow: Digital Scheme
Small businesses can develop digital skills by accessing free expert training and a 50% discount on new productivity-enhancing software, worth up to £5,000 each.
Apprentice Schemes
Businesses will be able to receive incentive payments of £3,000 for all new apprentice hires.
Creation of Freeports
Eight special economic zones with different rules to make it easier and cheaper to do business have been announced.
Other announcements:
● Universal Credit uplift of £20 a week will continue for a further six months
● The standard Personal Allowance increases to £12,570 from 6 April 2021, increase it again next year to £12,570, where it will remain until 2026
● Higher Rate threshold will similarly be increased next year, to £50,270,
● A £150 million fund, to help communities across the United Kingdom take ownership of pubs, theatres, shops, or local sports clubs at risk of loss, will be available.
● Stamp duty land tax break extended to 30 June instead of 31 March. Nil rate band will be £250,000 until the end of September, reducing to the usual level of £125,000 from 1 October.
Posted on 03/11/2021 by Ortolan