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So Rishi Sunak came out with his red case on Wednesday and delivered the eagerly awaited Spring Budget for 2021. I think many of us would have tuned in this year as it was always going to be an interesting one after the effects Covid 19 has had on the economy.
Here is a brief recap of the points I think will affect us small business owners:
Taxes & Employment
Income Tax Personal Allowance threshold to rise from £12,500 to £12,570 and higher rate to rise from £50,000 to £50,270 as of April 2021
Maintaining the income tax Personal Allowance and higher rate threshold from April 2022 until April 2026.
To balance the need to raise revenue with the objective of having an internationally competitive tax system, the rate of Corporation Tax will increase to 25%, which will remain the lowest rate in the G7. In order to support the recovery, the increase will not take effect until 2023. Businesses with profits of £50,000 or less, around 70% of actively trading companies, will continue to be taxed at 19% and a taper above £50,000 will be introduced so that only businesses with profits greater than £250,000 will be taxed at the full 25% rate.
Maintaining inheritance tax thresholds at their current levels until April 2026.
Capping the amount of SME payable R&D tax credit that a business can receive in any one year at £20,000 (plus three times the company’s total PAYE and NICs liability).
Maintaining the Lifetime Allowance at its current level of £1,073,100 until April 2026.
The National Living Wage age will be lowered from 25 to 23 years of age and the following rates will apply:
Covid Response
An extension of the Coronavirus Job Support Scheme to September 2021 across the UK. Employers will be expected to contribute 10% in July and then 20% in August and September whilst still covering the cost of pension and employer NIC contributions.
An extension of the UK-wide Self Employment Income Support scheme to September 2021, with a 4th and 5th grant and 600,000 more people who filed a tax return in 2019-20 now able to claim for the first time.
Six-month extension of the £20 per week Universal Credit uplift in Great Britain, with the Northern Ireland Executive receiving additional funding to match the increase. A one-off payment of £500 to eligible Working Tax Credit claimants across the UK.
Extension to the VAT cut to 5% for hospitality, accommodation and attractions across the UK until the end of September, followed by a 12.5% rate for a further six months until 31 March 2022.
750,000 eligible businesses in the retail, hospitality and leisure sectors in England will benefit from business rates relief.
Extension of the apprenticeship hiring incentive in England to September 2021 and an increase of payment to £3,000.
£7 million for a new “flexi-job” apprenticeship programme in England, that will enable apprentices to work with a number of employers in one sector.
Additional £126 million for 40,000 more traineeships in England, funding high quality work placements and training for 16-24 year olds in 2021/22 academic year.
More than doubling the legal limit for single contactless payments, from £45 to £100
Small and medium-sized employers in the UK will continue to be able to reclaim up to two weeks of eligible Statutory Sick Pay (SSP) costs per employee from the Government.
Grants & Loans
An extension to the temporary cut in Stamp Duty Land Tax in England and Northern Ireland until September will support the housing market and protect and create jobs.
A new mortgage guarantee scheme will enable all UK homebuyers secure a mortgage up to £600,000 with a 5% deposit.
£5 billion for new Restart Grants – a one off cash grant of up to £18,000 for hospitality, accommodation, leisure, personal care and gym businesses in England.
A new UK-wide Recovery Loan Scheme to make available loans between £25,001 and £10 million, and asset and invoice finance between £1,000 and £10 million, to help businesses of all sizes through the next stage of recovery.