Business Support – Budget 2021 – Thursday 4th March

Following yesterday’s budget announcement by the Chancellor, please find below the key information in regard to business support that has been released via gov.uk.

Coronavirus Job Retention Scheme (CJRS) – EXTENSION

The UK Government has reviewed the terms of the scheme and announced that the CJRS will be extended until the end of September 2021.

Employees will continue to receive 80% of their wages until the scheme ends, however businesses will be asked to contribute:

• 10% in July 2021
• 20% in August 2021

Self-employed Income Support Scheme (SEISS) – EXTENSION

The Self-Employment Income Support Scheme Grant Extension will provide critical support to the self-employed.

The fourth grant will cover February to April 2021, worth 80% of average trading profits.

There will be a fifth and final grant covering May to September.

You will be able to claim from late July if you are eligible for the fifth grant.

The amount of the fifth grant will be determined by how much your turnover has been reduced in the year April 2020 to April 2021.

The fifth grant will be worth:

• 80% of 3 months’ average trading profits, capped at £7,500, for those with a turnover reduction of 30% or more
• 30% of 3 months’ average trading profits, capped at £2,850, for those with a turnover reduction of less than 30%

Further details will be provided on the fifth grant in due course.

VAT Reduction – EXTENSION

The reduced rate of VAT of 5% on any eat-in or hot takeaway food and drinks from restaurants, cafes, and pubs, excluding alcohol will be extended until the end of September 2021.

Following this, the rate will gradually increase to 12.5% for six months, before returning to the standard rate of 20% from April 2022.

VAT deferral – NEW payment scheme

Businesses which took up the offer to defer VAT payments that would otherwise have been payable with (or in connection with) VAT returns due between 20 March 2020 and 30 June 2020 can now opt into the New Payment Scheme.

The New Payment Scheme allows businesses to pay the deferred VAT in up to 11 smaller interest-free instalments.

Businesses can opt into the New Payment Scheme in March, April, May or June but the later they opt in, the fewer instalments they are allowed to make.

Businesses can pay in fewer instalments but there must be a minimum of 2 instalments.

Alternatively, businesses can still pay the full deferred amount by 31 March 2021 or contact HMRC to arrange an alternative way of paying.

These options are fully legislated. The measure provides for a penalty of 5%, chargeable in relation to the amount of the deferred VAT that is outstanding if businesses have not paid in full, opted into the New Payment Scheme or made an alternative arrangement to pay by 30 June 2021.

Stamp Duty Land Tax (SDLT) – EXTENSION

The government has increased the threshold in England and Northern Ireland under which no SDLT is paid on the purchase of a main home from £125,000 to £500,000.

This will be extended until the end of September 2021.

Coronavirus Business Interruption Loans (CBILS) & Bounce Back Loans (BBL)

Both schemes will end on 31 March 2021, however the Treasury is launching a new loan scheme to run until 31 December 2021.

We will update you as soon as the full information is available.

Business Grants

£5bn restart grants for businesses will be made available to help companies get going after lockdown.

We will update you as soon as the full information is available.

Business Rates

Hospitality and leisure businesses will pay no business rates for three months.

Following this, the rates will then be discounted for the remining nine months of the year by two-thirds.

National Insurance, Income Tax and VAT

The government will not raise these taxes.

The personal allowance will remain at £12,750 until 2026.

The higher-rate income threshold will increase to £50,270 next year and remain at that level.

Corporation Tax

In April 2023, the rate Corporation Tax will increase to 25%.

The rate will be tapered, meaning only businesses with profits of more than £250,000 will be taxed at the full 25% rate.

Companies with profits of less than £50,000 will remain at 19%.

Company Investments

A new “super deduction” scheme to allow companies to reduce their Corporation Tax bill by 130% of the cost of new investments will be introduced.

We will update you as soon as the full information is available.

VAT thresholds

The VAT registration and deregistration thresholds will not change for 2 years from 1 April 2022.

The taxable turnover threshold, which determines whether a person must be registered for VAT, will remain at £85,000 until 31 March 2024.

The taxable turnover threshold, which determines whether a person may apply for deregistration, will remain at £83,000 until 31 March 2024.

Making Tax Digital (MTD) for VAT – EXTENSION

VAT registered businesses with taxable turnover below the current VAT threshold are not currently required to operate Making Tax Digital (MTD) for their VAT reporting and record keeping obligations.

From 1 April 2022, all VAT registered businesses must sign up, whatever they earn.

We will continue to closely monitor all developments as they progress and communicate these with you as soon as we can, to keep you fully informed.

Click below for previous updates:

Update 29 – 26th February 2021

Update 28 – 28th January 2021

Update 27 – 5th January 2021

Update 26 – 4th January 2021

Update 25 – 3rd December 2020

Update 24 – 23rd November 2020

Update 23 – 6th November 2020

Update 22 – 3rd November 2020

Update 21 – 26th October 2020

Update 20 – 28th September 2020

Update 19 – 8th September 2020

Update 18 – 18th August 2020

Update 17 – 10th August 2020

Update 16 – 30th July 2020

Update 15 – 9th July 2020

Update 14 – 26th June 2020

Update 13 – 15th June 2020

Update 12 – 1st June 2020

Update 11 – 6th May 2020

Update 10 – 30th April 2020

Update 9 – 16th April 2020

Update 8 – 9th April 2020

Update 7 – 7th April 2020

Update 6 – 2nd April 2020

Update 5  – 31st March 2020

Update 4 – 27th March 2020

Update 3 – 25th March 2020

Update 2 – 23rd March 2020

Update 1 – 19th March 2020