Budget March 2021

Published on Wednesday March 3, 2021

All the latest updates on the Budget March 2021.

Chancellor Rishi Sunak’s has given his much anticipated March 2021 budget today. All the details are still to be released so we will give you a brief overview of the main bits.

Budget 2021
Budget March 2021

Figures

So far a total of £280 billion pounds worth of support has been given since the start of the pandemic in March lsat year.

The economy shrunk by 10% in the last year with the borrowing being the highest ever outside of wartime. According to the OBR we have a good chance to get the economy back to pre-covid levels by the middle of 2022.

This will need to be paid once the economy has got back on track. Mr Sunak couldn’t give exact timings or cost on how this would happen, however, he has given two-measures regarding tax which we will go through briefly later on.

Fourth and Fifth SEISS Grant

Self-Employment Income Support Scheme

Those eligible under the Self Employed Income Support Scheme will be able to claim a fourth grant, this will be 80% of profits as before, with the same criteria but including the 19-20 return values. The one gratefully received addition to this is that those new businesses who started in 2019 who have completed their 2019-20 tax returns will be included for both the 4th and 5th SEISS grant.

The fourth grant will cover February, March and April 2021 and will be available in late April, you will be contacted in mid-April with your claim date.

The fifth grant will be slightly more complicated and we don’t have all the details yet, however, this is what we do know.

The fifth grant should be available in late July.

The amount of the fifth grant will be determined by how much your turnover has been reduced in the year April 2020 to April 2021.

The fifth grant will be worth:

  • 80% of 3 months’ average trading profits, capped at £7,500, for those with a turnover reduction of 30% or more
  • 30% of 3 months’ average trading profits, capped at £2,850, for those with a turnover reduction of less than 30%

More details are available below.

Self-Employment Income Support Scheme fourth grant

Furlough

Furlough has been extended until September 2021. This will be at the current 80% claimable by employers until June 2021, 70% until July and 60% for August and September. The employee must still receive the 80%

Recovery Loan

When the BBL and CBIL loans end in March a new recovery loan will be available. This will open on April 6th and will close 31st December 2021. Business that have received support under Covid loans already will be eligible to apply for this new loan too.

No personal guarantees will be taken on facilities up to £250,000. These loans are between £25,000 and £10,000,000.

Recovery Loan Scheme

VAT for tourism and hospitality

The 5% VAT rate has now been extended to the end of September 2021. This will then go to a temporary rate of 12.5% until March 2022 before reverting to the standard 20%

Corporation Tax Rate

In April 2023 corporation tax will rise to 25% for businesses with profits over £250,000. Profits up to £50,000 will stay at the current 19% with tapered increase between these two figures.

Rates Grants/Holidays

New restart grants will start in April, these will be as follows.

Non-essential retail businesses will receive grants of up to £6,000 per premises.

Hospitality and leisure businesses will get grants of up to £18,000.

Business rates holiday will be extended for eligible businesses until the end of June. For the remaining nine months of the year, business rates will be discounted by two thirds up to a value of £2m for closed businesses, with a lower cap for those who have been able to stay open.

New Super-deduction

From 1 April 2021 until 31 March 2023, companies investing in qualifying new plant and machinery assets will be able to claim:

  • a 130% super-deduction capital allowance on qualifying plant and machinery investments
  • a 50% first-year allowance for qualifying special rate assets

The super-deduction will allow companies to cut their tax bill by up to 25p for every £1 they invest, ensuring the UK capital allowances regime is amongst the world’s most competitive.

Other notable announcements

  • Personal tax thresholds, CGT IHT etc. limits all frozen until 2026 
  • New 3-year carry back of losses
  • All alcohol and fuel duties frozen for the second year in a row
  • Help to Grow: Digital will help SMEs to develop digital skills with free expert training and a 50% discount on new productivity-enhancing software
  • 20 Universal Credit uplift extended for a further 6 months with a one-off payment of £500
  • Stamp duty £500,000 nil rate extended until 30th June. With a transition period of £250,000 nil rate until September.
  • Personal tax thresholds, CGT IHT etc. limits all frozen until 2026 

If you would like anymore information on any of these changes please contact us and we will be happy to help.

If you would like to feature your business on our blog and get a big shout out on our social media, to show how you have adapted and thrived please get in touch.

All the best
The DL Accounts Team

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