04 Mar The Budget 2021 – Reliefs
Job protection
Furlough is going to be extended until the end of September with no changes to the current terms. Employees can receive 80% of their salary until this scheme comes to an end. As businesses start to reopen, the government is going to start to ask employers to contribute for some of the relief, where in July they will ask for a 10% contribution and then in August and September, the government will ask for a 20% contribution of employees’ wages that businesses are claiming furlough on.
CJRS eligibility from May
For periods from 1 May 2021 onwards, you will be able to claim for eligible employees who were employed by you and on your PAYE payroll on 2 March 2021. This means you must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 2 March 2021, notifying HMRC of earnings for that employee.
Self-employed support
The government have offered additional support for those self employed by offering a 4th and 5th grant. The 4th grant will cover the period February to April – which will be 80% of the sole trade profits. The 5th grant will cover May onwards, which again will be 80% of the total sole trade profits.
Businesses where their turnover has fallen by 30% or more will be covered by this grant. Where the turnover of a business had fallen by less than 30% – the business will receive a reduced 30% grant from the government.
Individuals who have set up new self-employed businesses and were not eligible to apply for the grants from the government, will now be eligible to apply for this providing they had submitted their tax return for the 2019/20 tax year by the 2nd of March 2021. This means that 600,000 more people who became self-employed will be eligible to claim the 4th and 5th grants offered by the UK government.
Employment
The National Living wage and National Minimum Wage will be increased for 2021/22 tax year;
| 23 and over | 21 to 22 | 18 to 20 | Under 18 | Apprentice | ||
| April 2021 (new rate) | £8.91 | £8.36 | £6.56 | £4.62 | £4.30 |
There is a further incentive for businesses to hire apprentices from the announcement of this budget. The government have announced they are going to double the inventive payment to businesses for taking on apprentice employees. Businesses will now receive £3,000 per apprentice of any age employed by that company.
The £20-a-week uplift in Universal Credit will continue for a further 6 months.
Eligible Working Tax Credits claimants can receive a one-off payment of £500.
Grants
In addition to the cash grants, the government have announced they intend to provide a new restart grant in April to assist with businesses reopening. The first businesses set to reopen are the non-essential retail businesses. They can receive up to £6,000 per premises.
Hospitality/Leisure/Gyms are also set to receive up to £18,000 in grants per premises due to these businesses being set to reopen later than the non-essential retail.
Recovery Loans
The government are introducing new recovery loans that businesses of any size can apply to where they can expect to borrow between £25,000 to £10 million through to the end of this year. The government act as a guarantor to lenders of up to 80% of the total loan value.
VAT
For the hospitality and tourism sector, the 5% reduced rate of VAT is extended until the 30th of September. There will then be an interim VAT rate of 12.5% for the following 6 months. From April 2022, the VAT rate will return to the standard rate.
Business Rates
England
As per the previous budget, the government offered a 100% business rate holiday in England for the retail/hospitality and leisure sectors. This business rate holiday will continue for the first 3 months of the year and is set to end in June. For the remaining 9 months of the year, the business rates due will be discounted by 2/3rds.
Scotland
At present, there is a 100% rates relief in place for Scottish business premises that are occupied and this is due to end on 31 March 2021. Relief for retail, hospitality and leisure sectors will be available until at least 30 June 2021.
Following the budget announcement, Scotland may fall in line with the England rates relief but this is yet to be announced.
Stamp Duty
England Only
The stamp duty cut for houses purchased for a cost below £500,000 will be charged no stamp duty up until 30 June 2021. From this date to the end of September 2021, the stamp duty rate for houses purchased below £250,000 will then fall into a nil rate band.
Houses purchased after 1st October 2021 will then be subject to the normal stamp duty charges.
Scotland
The above rates relief in England do not apply to Scotland (Or Wales) where the LBTT is expected to return to the usual rates from 31 March 2021.
For first time buyers, the government is introducing a new policy to assist them get onto the property ladder. First time buyers will only need to provide a 5% deposit to banks to be eligible to get a mortgage in the new government scheme. This applies to the whole of the UK.
Staying up to date
Our ethos at Infinity has always been that we are not just your accountants, but we are your partners in business and in these difficult times this has never been more important. We want to assure you all that we are doing everything we can to help you and should you have any question, big or small, please get in touch, we are here to help.
We will be releasing various documents with support and help through various channels. Please connect with our team on LinkedIn and Twitter using the following links.
Simon Cowie – Manging Director – Connect with Simon on LinkedIn
Greg Houston – Associate Director – Connect with Greg on LinkedIn
Alex Graham – Client Relationship Manager – Connect with Alex on LinkedIn
Bruce Giles – Client Relationship Manager – Connect with Bruce on LinkedIn
Mark Rhynas – Tax Manager – Connect with Mark on LinkedIn
LinkedIn – Infinity Partnership on LinkedIn
Twitter – Infinity Partnership on Twitter