The announcement that followed unveiled the Government’s commitment to further economic support in response to the pandemic, with an additional £65 billion of measures announced.
We will be providing a detailed summary of these announcements and their likely impact on you, your finances and your business interests tomorrow morning but, in the meantime, we have provided an overview summary of the Chancellor’s key Budget 2021 announcements:
Covid-19 support extension summary:
- Furlough scheme extended to the end of September, employers asked to contribute to wages from end of July, with tapered increases in contributions across July to September.
- Stamp Duty holiday extended to end of June, with nil rate band remaining at £500k then reducing to £250k until 30 September.
- The self-employed, including recently self-employed (2019-20), to be supported with two further SIESS grants to the end of September.
- National Living Wage will rise to £8.91 from April.
- Cash incentive to take on apprentices boosted by £1k to £3k per recruit.
- Restart Grants available in April to help small businesses reopen: grants of up to £6k per premises for non-essential retail businesses, grants of up to £18k for hospitality and leisure businesses.
- 100% business rates holiday extended to the end of June, further 2/3 discount for the remaining 9 months of the year (capped).
- Tourism and hospitality reduced VAT rate of 5% extended to the end of September, followed by a rate of 12.5% for a further 6 months.
Budget 2021 taxation:
- Threshold for basic rate of income tax to see small rise to £12,570 next year, higher rate threshold also seeing a small rise to £50,270 next year, both then set until 2026.
- Corporation tax rate to rise to 25% in 2023, but new Small Profits Rate (remaining at 19%) introduced for businesses with profits <£50k, with tapered bands up to £250k profits.
- VAT registration threshold remains at £85k until 2024.
- Super deduction announced for businesses investing in qualifying plant and machinery over the next two years which allows for a reduction in the company’s taxable profits by 130% of the cost.
- Temporary extension to the period for carrying back of trading losses for relief against profit
To read more of the key announcements from the 2021 Budget, read our detailed Budget summary here.