2021 Spring Budget Announcement Our guide to the chancellors 3 part plan
The chancellor has announced he is willing to do whatever it takes to protect the livelihoods of the British people. Here is our summary of the key points he made in the announcement:
The 3 Part 2021 Spring Budget Plan
There will be a 3 part plan:
- Support the British people and businesses
- Once we are on the way to recovery we will then begin fixing public finances
- Begin work on building the future economy
Key measures announced:
- We have made a swifter and more sustained recovery than expected
- UK economy is expected to return to pre-COVID measures by the middle of next year – that’s 6 months earlier than previously thought
- In 5 years time the economy will be 3% smaller than originally planned due to CV-19
- The economy will grow 4% this year
- The peak of unemployment will peak lower than expected
- Protecting jobs is the chancellors highest priority
- The furlough scheme has been extended until September 2021. Employees will continue to receive 80% of the hours not worked with employers contributing 10% in July, 20% in August and September.
- The 4th Self Employed Grant covering February to April will be available from April with claims amounting to up to 80% of three months average trading profits – capped at £7500.
- SEISS has been opened up for a 5th
- People who submitted a 2019-20 self-assessment tax return will be eligible for the 4th and 5th
- The 5th SIESS grant will cover May onwards and will be available from July.
- As the economy reopens over the summer people whose turnover has fallen by 30% may be eligible to receive an 80% grant.
- The £20 Universal Credit uplift has been extended until September.
- The new National Living Wage will rise from £8.72 to £8.91 and will be extended to 23 and 24 year olds.
- Apprentice incentive payments have been doubled to £3000 as of today. This is for all new hires of any age.
- £300m additional funding for Culture Recovery Fund.
- New Government Covid Recovery loans will be available for £25000 - £15m. These loans will be available first for non-essential retail businesses that are set to reopen in April.
- £19m extra funding will be given to help stop domestic violence victims and to prevent reoffending.
- £10m will be given to help Veterans struggling with mental health.
- 100% Business rates relief until June and the following 9 months will be discounted.
- 5% VAT rate will remain in place for the hospitality sector until 30th September 2021 and then an interim rate of 12.5% will be in place until April 2022 when the 20% rate will return.
- Stamp duty holiday for the nil rate band (under £500,000) will be extended until June 2021. The nil rate will then be £250,000 until September and return to £125,000 from 1st October 2021.
- New Government guarantee for mortgage borrowers and 5% deposits are coming back from next month in a bid to turn ‘Generation Rent’ to ‘Generation Buy’.
- Personal tax, Inheritance Tax and Capital Gains Tax threshold limits are all frozen until 2026.
- Capital gains tax rates will change from April 2023. Small businesses with a profit of less than £50K will remain at 19%, profits from £50K to £250K will be taxed at a tapered amount between 19% and 25% and businesses with profits over £250K will be taxed at the full 25%.
- New 3 year carryback of losses
- Super deduction – businesses will be able to reclaim 130% of investments for the next 2 years.
- Fuel duty increase cancelled. Alcohol duties frozen again.
- UK infrastructure bank will invest in public and private projects to promote green economy.
- Small businesses will receive free training to develop digital skills and will receive discounted software packages.
- 8 Freeports with simpler planning and easier tariffs.
- New levelling up in Northern towns.
An updated Finance Bill 2021 will be published on 11th March to reflect the above announcements.
Please note, the content of this guide is for providing clients with a clearer understanding. Tax rules and accounts guidance are ever-changing and current rules and legislation should be sought before relying upon any guidance provided which may be quickly outdated. You can contact us for more information around specific scenarios on 01453 333 923 or via our website at www.codexabsolute.co.uk
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