Budget update – March 2021

Budget update - March 2021

Live updates to be published here and then summarised after

Chancellor Rishi Shunak is set to release a budget for unusual times on 3rd March 2021 – “Whatever it takes”

Key announcements

  •  Protect jobs
    • Furlough scheme to be extended to end of September, no change to terms for employees
    • As businesses reopen employers will be asked to contribute more, July 10%, August 20%
    • incentive payments doubled for employers taking on apprentices to £3,000
    • Furlough fraud scheme investigation team to be funded.
  • SEISS round 4 grant to be announced – rumours that this will potentially be based on 2019/20 data and a 5th grant for May, opening late July
    • Turnover has fallen by 30% of more and will receive 80% any above that will get 30%
    • Will be based on tax returns as long as filed by midnight last night. Can claim 4th and 5th grants
  • Support for the arts and culture sector in a bid to help museums, theatres, galleries and live music venues reopen in the coming month
    • Restart grant in April – up to £18k New Restart grant will be available in due course – retail could claim £6k, hospitality/gyms etc could claim up to £18k
  • New recovery loan schemes to replace bounceback and CBILS but with a guarantee for only 80% of the money
  • Corporation tax – Not going to raise rate of income tax, vat or corporation tax – freeze personal allowance thresholds, increase next year but then kept until 2026. Higher rate threshold
  • Small business rate to be introduced for businesses with less than £50,000 at 19%, taper will also apply above that limit 25% tax rate
  • A “super deduction” of 130% for investment in capital for the next two years From 1 April 2021 until 31 March 2023, companies investing in
    qualifying new plant and machinery assets will benefit from a 130% first-year capital allowance.
    This upfront super-deduction will allow companies to cut their tax bill by up to 25p for every
    £1 they invest, ensuring the UK capital allowances regime is amongst the world’s most
    competitive. I
  • Business rates relief to be extended – 100% holiday, retail hospitality and leisure for first 3 months of the year, then discounted by 2/3rds for remainder of the year
  • VAT – The reduced rate of VAT for hospitality and leisure businesses extended until the end of September.  Interim VAT rate of 12.5% extended for another 6 months. Not returning to standard rate until April next year. #Budget2021
  • Free management training courses for firms – “Help to Grow”. Productivity issues to be tackled with a new set of UK schemes – ‘help to grow’ for SMEs to get management training
  • One would like to hope no increase to any alcohol duties!!! Whoop whoop all alcohol duties increase frozen. Get those pubs open
  • The launch of first round of levelling up fund – apply today! Supporting community ownership of Pubs.
  • Income tax and NIC rates frozen until 2026 VAT registration threshold frozen until 2024 Corporation Tax Changes from April 2023 Furlough extended until 30 September 2021 SEISS Grants 4 and 5 announced VAT for hospitality frozen at 5% and then rising to 12.5%  https://www.gov.uk/government/publications/self-employment-income-support-scheme-grant-extension/self-employment-income-support-scheme-grant-extension
  • Help to Grow: Digital – The government will launch a new UK-wide scheme in the
    autumn to help 100,000 SMEs save time and money by adopting productivity-enhancing
    software, transforming the way they do business. This will combine a voucher covering up to
    half of the costs of approved software up to a maximum of £5,000, and free impartial advice,
    delivered through an online platform.27
  • 23rd March will also be a crucial date as there are set to be a few more announcements.