Blog Layout

TML Budget Summary 2021

Mar 04, 2021
After what has been an unprecedented year across the UK, the team here at TML were looking forward with optimism both to the year ahead and the budget which was delivered by Chancellor Rishi Sunak yesterday (3rd March 2021). Overnight our team has been dissecting his delivery and have produced the following highlights which are going to have the biggest impact on business owners and the self-employed.
If you have any questions or would like to discuss your financial situation and plans for your business with one of our experts, don't forget you can book a call with us.

BUSINESS FOCUSED
  • Furlough 
    • This scheme has been extended to the end of September 2021
    • As announced in advance, this will continue with workers continuing to receive 80% of their current salary for hours they don't work due to being furloughed.
    • This support will come in the form of a grant to employers who will make a contribution of 10% of the worker's salary for unworked hours in July and 20% contribution in August and September.
    • The £2,500 monthly limit for the grant remains
  • Coronavirus Business Interruption Loan Scheme (CBILS)
    • As planned this is closing on 31st March 2021
  • NEW Recovery Loan Scheme
    • From 6th April 2021 the Recovery Loan Scheme will provide lenders with a guarantee of 80% on eligible loans between £25,000 and £10 million. This will be available to all businesses, including those who have already received support under the existing COVID-19 guaranteed loan schemes.
    • If you would like to know more about this, get in touch and we can offer further advice as more details of this are confirmed from lenders.
  • NEW Restart Grants to Help Businesses Reopen
    • Non-essential retail businesses will receive grants up to £6,000 per premises
    • Hospitality and leisure (which includes personal care and gyms) can each receive grants of up-to £18,000 (where they are impacted by restrictions and may not open until later this year)
  • Minimum wage 
    • Minimum wage to increase to £8.91 an hour from April 2021
  • Corporation Tax 
    • This will remain at 19% for business profits up-to £50,000
    • There will be a tapered increase to 25% for profits over £250,000 from April 2023
  • VAT for Hospitality & Tourism
    • The VAT cut to 5% for hospitality and tourism industries remains until the end of September
    • From Oct to Mar it will rise to 12.5%
    • Returns to 20% from April 2021
  • VAT Threshold
    • This remains at £85,000 until 2024
  • Business Investment Tax Relief & Loss Relief
    • 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.
  • Rates Relief
    • Eligible retail, hospitality and leisure properties in England will continue to receive 100% business rates relief from 1st April 2021 to 30th June 2021.
    • 66% business rates relief will be applied for the period from 1st July 2021 to 31st March 2022, capped at £2 million per business for properties that were required to be closed on 5th January 2021, or £105,000 per business for other eligible properties.
    • Nurseries will also qualify for relief in the same way as other eligible properties

PERSONAL FOCUSED
  • Support for the self-employed 
    • This has been extended until September
    • It is estimated that 600,000 more self-employed people will be eligible for help as access to grants is widened
  • Credit updates
    • £20 weekly uplift in Universal Credit worth £1,000 a year to be extended for another six months
    • Working Tax Credit claimants will get £500 one-off payment Tax-Free Allowance
      • Basic allowance will increase to £12,570 from April 2021, and then it will stay at that level until 2026. 
      • The Higher Rate threshold will increase to £50,270 and will then also be frozen to 2026.
  • National Insurance
    • In the 2021/22 tax year the new National Insurance thresholds are:
      • Primary Threshold/Lower Profits Limit increases to £9,568
      • Upper Earnings Limit (UEL)/Upper Profits Limit increases to £50,270
      • No changes were announced to the rates of Income Tax or National Insurance
  • Inheritance Tax
    • The threshold for paying Inheritance Tax remains at £325,000 and will continue at that level to 2026
  • Pensions Lifetime Allowance
    • Remains at £1,073,100 and will be maintained at that level to 2026
  • Capital Gains Tax 
    • Annual exempt amount remains at £12,300 (maintained at that level to 2026)
  • Personal Savings
    • Band of savings income that is subject to the 0% starting tax rate (remaining at its current level of £5,000 for 2021-22)
    • Adult ISA annual subscription limit for 2021-22 will remain unchanged at £20,000
    • Annual subscription limit for Junior ISAs and Child Trust Funds for 2021-22 will remain unchanged at £9,000
  • Stamp Duty Land Tax
    • Stamp duty holiday for the first £500,000 Nil Rate Band of the purchase price will continue until the end of June. 
    • From 1st July 2021, the Nil Rate Band will reduce to £250,000 until 30th September 2021 
    • Return to £125,000 on 1st October 2021
  • Mortgage Guarantee Scheme
    • This will be introduced in April 2021 to provide a guarantee to lenders across the UK who offer mortgages to people with a deposit of just 5% on homes with a value of up to £600,000
    • All buyers will have the opportunity to fix their initial mortgage rate for at least five years should they wish to
We hope that there are elements of positive news within the overall budget for you in various ways and whether this provides opportunity or clarity on your current financial position, don't forget the TML team is here to help.
Book a Call
Share by: