Spring Budget 2021

The Chancellor, Rishi Sunak, has delivered the 2021 Spring Budget. This included no surprises to what was expected from todays statement, we have therefore summarised the points which we feel will affect both individuals and businesses.

 

Individuals

 

• The income tax personal allowance of £12,500 will increase to £12,570 from April 2021 along with the higher rate threshold increasing from £50,000 to £50,270. These will remain in place until April 2026.
• The Inheritance Tax, Capital Gains Tax, Pension lifetime allowance will all be maintained at the current levels until April 2026.
• Adult ISA annual subscription limits for 2021-2022 will remain unchanged at £20,000.
• Alcohol and fuel duties will be frozen across the board.
• The Self-employed grants will be extended until September 2021 which means that people who filed their first tax return in 2019/20 will now be eligible to claim on the scheme.
• An extension to the temporary cut in stamp duty land tax in England and Northern Ireland until September 2021 will support the housing market.
• The £20 per week universal credit uplift has also been extended for six months. There is also a one of payment of £500 to eligible working tax credit claimants across the UK.
• The single contactless payment limit has been increased from £45 to £100.

 

Businesses

 

• There will be a one-off cash grant available of up to £6,000 for non-essential retailers and up to £18,000 for hospitality, accommodation, leisure, personal care and gym businesses in England.
• As the Bounce Back Loan scheme is ending on 31^st March 2021, a new recovery loan scheme is being made available from 6^th April 2021 with loans between £25,001 and £10m. Also, asset and invoice finance between £1,000 and £10m. This will help businesses of all sizes through the next stage of recovery. Businesses will be eligible for this even if they have claimed a previous COVID19 loan.
• The 5% VAT cut is being extended for the hospitality, accommodation, and attractions across the UK until end of September. This will be followed by a 12.5% rate for a further six months until 31^st March 2022.
• Eligible businesses in the retail, hospitality and leisure sectors will be able to benefit from Business Rates Relief.
• The apprenticeship hiring incentive is being extended until September 2021 with an increase of payment to £3,000.
• Furlough scheme has been extended until September 2021 however, the rates will be reducing meaning this will cost employer an additional 10% in July and 20% in August and September. Employees will continue to receive 80% of their wages (up to a £2,500 monthly cap).
• Small and medium sized employers will continue to be able to reclaim up to two weeks of eligible statutory sick pay (SSP) costs per employee, from the government.
• From April 2023 limited companies with profits of £50,000 or less will continue to be taxed at 19%, however, profits greater than £250,000 will be taxed at 25%, with a taper being introduced for profits between £50,001 and £250,000.
• As of April 2021, a new ‘super-deduction’ will be introduced while will mean that companies will receive a 130% taxable deduction (a saving of 25p for every £1) for new equipment purchased.
• Companies will be able to carry back any losses for three years (currently only 1 year) which will mean corporation tax refunds can be claimed where applicable.
• A new Help to Grow scheme is going to be offered to companies however, details are yet to be announced of what this will involve.
• There is going to be a review of Research & Development tax reliefs to ensure the UK remains a competitive location to cutting edge research.

 

Although further information has been released within the budget, we felt that this was a summarised overview.