On Wednesday 3 March, the Chancellor announced the Budget for 2021. To help you understand how this might affect you and/or your business, we have summarised the key points.
The details, as well as relevant implications, are of course very important to understand. If you have any questions, please get in touch.
The Coronavirus Job Retention Scheme
- Furlough has been extended until the end of September 2021.
- The Government will continue to pay 80% of an employee’s current salary, for hours they cannot work.
- Employers will be asked to contribute 10% in July and 20% in August and September.
Self-Employed Income Support Scheme
- Support for the self-employed to be extended until September.
- £20 uplift in Universal Credit worth £1,000 a year, to be extended for another six months.
- Working Tax Credit claimants will get a £500 one-off payment.
- Minimum wage to increase to £8.91 an hour from April.
- VAT rate for hospitality firms to be maintained at 5% until September and an interim rate of 12.5% to apply for the following six months.
- Business rates holiday for firms in England to continue until June, with a 75% discount after that.
Taxation and General Business Measures
- No changes to rates of Income Tax, National Insurance, Capital Gains Tax or VAT.
- Personal income tax allowance to be frozen at £12,570 from 2022 to 2026.
- Higher rate income tax threshold to be frozen at £50,270 from 2022 to 2026.
- Corporation tax on company profits to rise from 19% to 25% in April 2023. However, rate to be kept at 19% for about 1.5 million smaller companies with profits of less than £50,000, and a marginal rate applied for companies with profits between £50,000 and £250,000.
- To further support the cash-flow of businesses, the Government is extending the loss carry back rules. Companies will be able to carry back up to £2 million of losses for 3 years, therefore giving a potential maximum tax refund of £760,000.
- Stamp duty holiday extended to June, with no levy on sales of under £500,000.
- No changes to inheritance tax or lifetime pension allowance or capital gains tax allowances.
- A ‘super deduction’ for companies investing in qualifying new plant and machinery assets, allowing them to “deduct” investment costs from tax bills, reducing costs by 130%. This super deduction will be available for two years, from 1 April 2021.
- For accounting periods beginning on or after 1 April 2021, the amount of SME payable R&D tax credit that a business can receive in any one year will be capped at £20,000, plus three times the company’s total PAYE and NICs liability.
- Tax breaks for firms to “unlock” £20 billion worth of business investment.
- Incentive grants for apprenticeships to double to £3,000 per apprentice employed, and £126 million additional investment in traineeships.
- Reform of the Global Talent visa category and review of the Innovator visa category.
- Introducing by March 2022, a new elite points-based visa allowing for a fast-track visa.
Launch of a new Global Business Mobility visa by spring 2022 for overseas businesses to establish a presence or transfer staff to the UK. This will help start-ups and rapidly growing tech firms source talent from overseas.
Dixcart provide specialist tax, legal and accounting advice to the tech sector, to start-ups, and to well-established companies alike. From tax-advantaged fundraising to incentivising employees, R&D tax credits, to cloud accounting, expanding overseas, to realising the value of your business, we can help.