Budget 2021

A summary of the announcements made by the Chancellor of the Exchequer Rishi Sunak in the 2021 Budget on Wednesday 3rd March 2021.

Corporation tax

• Rate of tax for companies with profits over £50,000 to rise from 19% to 25% on April 1st 2023
• Taper above £50,000 profits so businesses only start paying the full rate on profits from £250,000.

Small companies with profits of £50,000 and below will receive a small business corporation tax rate of 19% this will be called small profits rate.

Personal tax and national insurance and VAT

Rates of income tax, national insurance, or VAT will not raise. Freezing personal tax thresholds. Nobody’s take-home pay will be less than it is now, as a result of this.

Tax-Free Allowance to be frozen (until 2026) at £12,570, the Higher rate at £50.27

Self-employed 

4th Grant @ 80% average trading profits (February - April) available in April
5th Grant open from July will target support towards most affected by the pandemic

• Any new self-employed can apply for both grants as long as 19/20 self-assessment filed by 2nd March
• SEISS 5 open from July to cover May to July. If you have a 30% + fall in turnover you get 80% of average profits, under a 30% fall in turnover get a 30% Grant.

More detailed information on the fourth and fifth grants is available here

Furlough

• Furlough scheme extended until the end of September
• From July, employers. must contribute 10%
• From August, must contribute 20%

VAT

Hospitality and tourism reduced rate of 5% VAT extended until 30th September when it will rise to 12.5% until April 2022.

Business rates

100% business rates holiday through to the end of June. For the remaining nine months of the year, business rates will still be discounted by two thirds (66.6% reduction) until April 2022, up to a value of £2m for closed businesses.

New loan recovery scheme

Businesses of any size can apply for loans from £25,000 up to £10m, through to the end of this year. The government will guarantee lenders with 80%.

Culture recovery fund

Culture Recovery Fund and supporting our arts, culture and sporting institutions as they reopen.

Restart grants 

Restart grants of £6,000 for the first businesses to reopen. Hospitality and leisure businesses including personal care and gyms, will open later, or be under more restrictions, so we'll pay them grants of up to £18,000.

Restart grants 

Restart grants of £6,000 for the first businesses to reopen. Hospitality and leisure businesses including personal care and gyms, will open later, or be under more restrictions, so we'll pay them grants of up to £18,000.

A new taxpayer protection taskforce

A new £100m team to crack-down on COVID fraudsters who have exploited government support schemes. There will be 1,250 HMRC investigators who have sought to fraudulently claim taxpayer's money.

Other points

• Universal top-up £20 to be extended until October
• One-off £500 uplift in working tax credit
• Minimum wage £8.91 per hour from April
• Investment allowance of 130% introduced
• Incentive Grants for apprenticeships to rise to £3,000
• Contactless payment limit raised to £100

You can read the official budget document here - https://www.gov.uk/government/topical-events/budget-2021