There is short-term support announced by the Chancellor in the budget. Rishi Sunak unveiled a package of support including extensions to the two major income support schemes, alongside extensions of universal credit, tax credits and stamp duty land tax. Support for business including restart grants, an extension of business rate relief, loss relief carrybacks being extended to three years and reduced VAT rates for the hospitality sector.

We have summarized below the key points from the budget:

Pandemic Support.

• While the people are going through such a challenging time, Mr Rishi extended the furlough Scheme until the end of September 2021.
• This Scheme pays 80% of employees’ wages for the hours they cannot work in this pandemic. This will help millions of people through “the challenging months ahead”.
• Organizations will contribute to employees’ wages 10% in July & 20% in August & September.
• The support for self-employed people will be extended until September where they will be eligible for grants such as Loans, allowances, contributions easily.
• A person minimum wage to increase in this budget is around £8.91 an hour from April 2021.
• Anyone who is an active credit claimant will get £500 onetime payment as a return.
• A weekly uplift of £20 in Universal Credit worth £1,000 a year is to be extended for another six months.

Taxation

• There will be no changes adhere to rates of income tax and national insurance or VAT.
• A tax-free personal allowance will be fixed for people at £12,570 from April 2021 up to 2026.
• Higher rate income tax threshold to be fixed at £50,270 from April 2021 up to 2026
• Corporation tax on company profits above £250,000 to rise from 19% to 25% in April 2023
• Around 1.5 million small company tax rates will be kept at 19% with profits of less than £50,000
• Stamp duty holiday on house purchases in England and Northern Ireland extended to 30 June
• No tax charge will be charged on sales of less than £500,000
• Inheritance tax thresholds, pensions lifetime allowances and annual capital gains tax exemptions to be fixed at 2020-2021 levels until 2025-26.

Health and education

• Remarkable support of £1.65bn for the UK’s vaccination rollout and £50m to boost the UK’s vaccine testing capability.
• £19m for domestic violence programs, funding network of respite rooms for homeless women.
• £40m of new funding for victims of the 1960s Thalidomide scandal and lifetime support guarantee.
• £10m to support armed forces veterans with mental health needs

Business, digital and science

• Budget 2021 supports people to unlock £20bn worth of business investment.
• Firms will deduct investment costs from tax bills, reducing taxable profits by 130%.
• Firms will provide incentives with a rise to £3,000 and £126m for traineeships
• Hospitality firms will be maintained at a 5% VAT rate until September
• Business rates holiday for firms in England to continue until June with 75% discount after that
• Shops/Business that were forced to close, are granted £5bn to restart.
• £6,000 per premises for non-essential outlets due to re-open in April and £18,000 for gyms, personal care providers and other hospitality and leisure businesses
• New visa scheme to help start-ups and rapidly growing tech firms source talent from overseas.

The arts and sport

• Nearly £400m budgeted for arts venues in England, including museums and galleries, re-open.
• £300m recovery package for professional sport and £25m for grassroots football &
• £1.2m to help stage delayed Women’s Euros football tournament in England in 2022.

 The budget is what was expected, the retention of covid support and fixing of most of the tax rates is a positive sign and will bring in business confidence and certainty when markets will fully open.

In these times of uncertainty if you need to consult about any of your bookkeeping, accounting or tax needs. We are providing free consultancy support to our new clients.

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