Budget 2021: What does it mean for you?
An interesting budget to say the least. No help for Directors of Companies again but some extensions to SEISS and the Furlough scheme.
New restart grants available for all non-essential retailers of £6,000 which will be paid by your local authority but no timescale announced other than councils will receive the funds in April.
£18,000 available for Hospitality, leisure and personal care businesses on a scale, RV £15k or less will get £8k, RV between £15k and £51k will get £12k and RV above £51k will get £18k, again from local council as above.
New Loan Scheme announced, businesses can lend from £25k to £10m and the government will guarantee 80% which replaces the BBLS, CBILS and CLBILS.
Business Rates holiday extended to end June and further discounts available from July onwards.
Personal Tax allowance will increase to £12,570 from 6 April 2021 as previously announced but will stay at that level until 2026. The higher rate threshold will increase to £50,270 but will again remain at that until 2026.
2019-20 Tax returns now included
The Chancellor announced an extension to the scheme with the 4th grant covering Feb-Apr and will be paid at 80% of profit up to £2,500.
5th grant will cover May-Jul and again will be paid at 80% of profits up to £2,500.
But beware, the 80% will reduce to 30% if you have not suffered a reduction in turnover of 30% or more.
The criteria remains the same: your total income for self-employment must be 50% or more of your total income and no more than £50,000.
It’s unclear when the 4th grant application will be opened but we are told it will be sometime in April.
We’re disappointed to note that Directors have yet again been excluded.
CJRS to continue protecting jobs
The furlough scheme is being extended until the end of September 2021. The scheme currently pays 80% of employees’ wages for hours not worked due to the pandemic.
Employers will be expected to pay 10% towards those furloughed hours in July, increasing to 20% in August and September, as the economy starts to open up again.
Employers will still have to pay the Employers NI and Pension contributions as these cannot be claimed through the scheme.
Seamount Payroll will continue to calculate and claim on behalf of its clients as it has done since March 2020.
Our MD has campaigned long and hard for the Government to introduce a 2-tier Corporation Tax scheme and today the Chancellor granted her wish.
Corporation Tax will increase to 25% from April 2023 however a small profits rate of 19% will apply to those business with a profit of less than £50,000.
This rate will taper upwards until a profit level of £250,000 is achieved. We have not been told the details of the taper as yet but we anticipate it increasing around 1% per £50,000 of profit.
VAT for the Hospitality Industry
VAT is to remain at 5% for the hospitality industry until September when an interim rate of 12.5% will be introduced until Apr 2022.
It will then revert back to the current standard rate of 20%.
We can’t wait to be able to visit a restaurant again soon!
If you don’t know and understand your numbers and haven’t spoken to or had guidance from your accountants in the last year CONTACT US to see how we can help you.