From April 2023,
- The main rate will increase to 25% on profits over £250,000.
- Small businesses rate of 19% for profits below £50,000.
- A taper relief in between.
- The 5% rate of VAT for hospitality and leisure is extended.
- Increasing to 12.5% from October 2021.
- Returns to 20% from April 2022
VAT registration thresholds remain unchanged until 31 March 2024.
- A new ‘super deduction’ of 130% First Year Allowance will apply to investment in qualifying plant and machinery.
- 50% first-year capital allowance on qualifying special rate and long-life assets.
Business rates for retail, hospitality and leisure sectors:
- 100% until 30 June 2021.
- 66% until 31 March 2022.
- capped at £2 million per business.
Loss carry back:
- The trading loss carry back is temporarily increased from one to three years for all businesses.
- Employers who hire new apprentices between 1 April 2021 and 30 September 2021 will benefit from a payment of £3,000 per new apprentice.
COVID-19 support measures
Recovery Loan Scheme:
- Lenders will be provided with an 80% guarantee on qualifying loans between £25,000 and £10 million.
- The scheme is open to all businesses including those that have already received COVID-19 guaranteed loans.
Restart grants to support businesses as they re-open after the lockdown:
- Up to £6,000 for each non-essential retail premises.
- Up to £18,000 for hospitality, accommodation, leisure, personal care, and gym businesses.
Coronavirus Job Protection Scheme:
- Extended until the end of September 2021.
- Employees will be paid 80% of their wages for the hours they cannot work.
- Employers will be required to contribute 10% from July.
Self-Employment Income Support Scheme:
- A fourth grant will be available to those self-employed workers still affected by the coronavirus pandemic. Claims can be made from April 2021 for grants worth up to 80% of three months’ average trading profits up to £7,500.
- A fifth grant will cover the period up to the end of September 2021.
- The newly self-employed can also apply provided their tax returns were submitted by midnight on 2nd March 2021.
Help to Grow (Management):
- Small Businesses will be able to access free, 12-week, online Business Management training to enable them to upskill staff.
Help to Grow (Digital):
- A new UK-wide scheme will help small businesses adopt productivity-enhancing software with a voucher covering up to half of the costs of approved software and free impartial advice up to £5,000.
- Basic rate will rise to £12,570 in 2021/22.
- The Higher Rate Threshold will rise to £50,270.
- Rates will then be frozen until 2026.
- NIC thresholds will increase in 2021/22. Then be frozen until 2026.
- The lifetime allowance will be frozen at its current level (£1,073,100) until April 2026.
- ISA, Junior ISA and Child Trust Fund subscription limits remain unchanged in 2021/22.
- The nil-rate savings band remains unchanged (£5,000).
- Current thresholds will be frozen until 2026.
Capital Gains tax:
- The annual exempt amount (£12,300) will remain unchanged until 2026.
- The payment limit on contactless card for a single payment will be increased to £100 and £300 cumulatively in a single day.
Duty and other measures
Stamp duty land tax:
- £500,000 nil rate band will be extended until 30 June 2021.
- £250,000 will apply from July to September 2021.
- Returns to £125,000 from October 2021.
Vehicle excise duty:
- This will increase in line with RPI for cars, vans, and motorcycles from April 2021.
- The planned increase in fuel duty has been scrapped.
Air passenger duty:
- All planned alcohol duty increases have been scrapped.
- The government have announced the creation of eight Freeports across the UK. Businesses in Freeport areas will benefit from more generous tax reliefs, customs benefits, and wider support. The government will legislate for reliefs including business rate reliefs, enhanced buildings and structures relief, stamp duty land tax relief and employer national insurance contribution relief.
- A new elite, points-based visa will be introduced by March 2022 to enable those with a job offer from a recognised UK scale-up to qualify for a fast-track visa.
Don’t hesitate to contact us for more information on how the 2021 budget affects you.