- Foxmain Associates
Budget 2021 - An initial update to The Chancellors Budget statement
Further information will follow once the Finance Act is published however, some of the headlines of The Chancellor's budget are as follows: -
Corporation tax will increase to 25% from April 2023. However, for small businesses with profits of £50,000 or less, the rate will remain at 19%. A tiered system will be in place for companies with profits between £50,000 and £250,000 paying rates between 19% and 25%, such that only companies with profits of 25% will pay the full rate.
Income tax thresholds will rise to £12,570 from April 2022, and higher rate payers the threshold will rise to £50,270. These rates will be frozen until April 2026.
The furlough scheme will be in place until September 2021, where it will operate as it does now until 30 June 2021, from which time employers will need to make a 10% contribution in July 2021 and a 20% contribution in August and September 2021.
A further 600,000 of self employed individuals will be eligible for the SEISS grant following submission of self-assessment tax returns for the year ended 5 April 2020, provided said returns were submitted by midnight on 2 March 2021.
The SEISS grant will be extended, a fourth SEISS grant for February to April 2021 which will cover 80% of profits, capped at £7,500. A further fifth grant has been announced, whereby the grant will be worth 80% of average monthly trading profits for those who have seen a drop in turnover of 30% or above. People who have not seen a drop in turnover of 30% or above may be eligible for a fifth SEISS grant at 30% of average trading profits.
The Universal Credit top-up of £20 per week will continue for a further six months.
The 5% reduced VAT rate of VAT for tourism and hospitality will be extended for six months to 30 September 2021, rising to 12.5% from 1 October 2021 to 31 March 2022, returning to 20% on 1 April 2022.
The 100% Business Rates holiday for the tourism and hospitality will remain until the end of June 2021, and then there will be a 2/3rd discount for the remainder of the tax year, with a lower cap for those who have been able to stay open.
The Stamp Duty cut will continue with a £nil rate band of £500,000 until 30 June 2021, when the £nil band will drop to £250,000 until 30 September 2021, returning to the £125,000 threshold on 1 October 2021.
Further information will be published when known.