BUDGET 2021 Update

Wednesday 3^rd March 2020 saw Chancellor Rishi Sunak make a number of key announcements for the UK.

From stamp duty extensions to furlough extending further we look at what this means for us all over the coming months. The chancellor expressed that the pandemic has fundamentally altered everyone’s lives and the budget today was intended to be a three-part plan to protect the jobs and livelihoods of the UK.

“The damage coronavirus has done to our economy has been acute. Since March, over 700,000 people have lost their jobs. Our economy has shrunk by 10% – the largest fall in over 300 years.”

The country is in an economic shock and the government has delivered the very comprehensive and sustained response the UK has ever seen.

We have key pointed and added further information to follow:

Extending & cash injections

• An extra £1.65 billion cash injection to ensure the Covid-19 vaccination roll-out in England continues to be a success.
• An extension of the Coronavirus Job Support Scheme to September 2021 across the UK.
• 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.
• An extension to the temporary cut in Stamp Duty Land Tax in England and Northern Ireland until September will support the housing market.
• A new mortgage guarantee scheme will enable all UK homebuyers to secure a mortgage of up to £600,000 with a 5% deposit.
• £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.
• 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.
• Extension of the Film & TV Production Restart scheme in the UK, with an additional £300 million to support theatres, museums, and other cultural organisations in England through the Culture Recovery Fund.
• The six-month extension of the £20 per week Universal Credit uplift in Great Britain, with the Northern Ireland Executive receiving additional funding to match the increase. A one-off payment of £500 to eligible Working Tax Credit claimants across the UK.
• Extension to the VAT cut to 5% for hospitality, accommodation, and attractions across the UK until the end of September, 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.
• Extension of the apprenticeship hiring incentive in England to September 2021 and an increase of payment to £3,000.
• £7 million for a new “flexi-job” apprenticeship program in England that will enable apprentices to work with a number of employers in one sector.
• Additional £126 million for 40,000 more traineeships in England, funding high-quality work placements and training for 16-24-year-olds in 2021/22 academic year.
• More than double the legal limit for single contactless payments, from £45 to £100.
• £10 million to support veterans with mental health needs across the UK.
• £19 million to tackle domestic abuse in England and Wales, with funding for a network of ‘Respite Rooms’ to support homeless women and a program to prevent reoffending.
• £90 million funding to support our government-sponsored national museums in England due to the financial impact of Covid-19.
• £300 million for major spectator sports, supporting clubs and governing bodies in England as fans begin to return to stadia.
• 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.
• To further support the cashflow of businesses, the government is extending the loss carry-back rules worth up to £760,000 per company.
• £100 million for a new Taxpayer Protection Taskforce to crack-down on COVID fraudsters who have exploited UK Government support schemes.

Strengthening the public finances

• Maintaining the income tax Personal Allowance and higher rate threshold from April 2022 until April 2026.
• To balance the need to raise revenue with the objective of having an internationally competitive tax system, the rate of Corporation Tax will increase to 25%, which will remain the lowest rate in the G7. In order to support the recovery, the increase will not take effect until 2023. Businesses with profits of £50,000 or less, around 70% of actively trading companies, will continue to be taxed at 19% and 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.
• Maintaining inheritance tax thresholds at their current levels until April 2026.
• Fuel duty will be frozen for the 11th consecutive year.
• Alcohol duties will be frozen across the board for the second year running saving drinkers £1.7 billion.
• 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).
• Maintaining the Lifetime Allowance at its current level of £1,073,100 until April 2026.
• The adult ISA annual subscription limit for 2021-22 will remain unchanged at £20,000.

Investment led recovery

• Beginning April 2021, the new super-deduction will cut companies’ tax bill by 25p for every pound they invest in new equipment. This is worth around £25 billion to UK companies over the two-year period the super-deduction will be in full effect.
• Eight new English Freeports will be based in East Midlands Airport, Felixstowe & Harwich, Humber, Liverpool City Region, Plymouth, Solent, Thames and Teesside.
• Reforms to the immigration system will help ambitious UK businesses attract the brightest and best international talent.
• A new Help to Grow scheme to offer up to 130,000 companies across the UK a digital and management boost.
• £2.8 million to support a UK and Ireland bid to host the 2030 World Cup and £25 million investment in UK grassroots sports, enough for around 700 new pitches.
• £135 million to progress A66 Trans-Pennine upgrade.
• £28 million to fund the Queen’s Platinum Jubilee celebrations in 2022, delivering a major celebration for the UK.

Read the full Budget 2021 speech.

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