The Chancellor used his Budget this week to outline the Government’s plans for continuing to support businesses with COVID-19 support packages, as well as the future plans for taxation.

Continuation of COVID-19 Support

Coronavirus Job Retention Scheme

Rather than ending as planned in April, this Scheme has now been extended until September 2021, with employees continuing to receive 80% of their salary for hours not worked whilst furloughed.
The Scheme will cover the 80% wage cost up to June, with Employers required to pay 10% in July and then 20% in August and September. This is in addition to the employer's national insurance and pension contributions they are already paying on hours not worked by employees.
From May, an employer will be able to claim for those who were employed and on the payroll via an RTI submission prior to 2 March 2021 (previously 30 October 2020).

Self Employment Income Support Scheme (SEISS)

The fourth and fifth Self-Employment Income Support Scheme (SEISS) were announced.
The fourth SEISS grant will cover February – April 2021 and will be paid in April in line with previous SEISS grants at 80% of average earnings of trading profits, up to a maximum of £2,500 per month.
The fifth and final SEISS grant will cover May – September 2021 will be available for individuals whose turnover has fallen by 30% or more, who will continue to receive 80% of three months’ average trading profits, with a £7,500 maximum for five month period.
If turnover has fallen by less than 30% then the grant will be restricted to 30%, capped at £2,850 for the five month period.
It was also announced that the 2019/2020 tax year would be taken into consideration when calculating these two final grants, as long as an individual’s tax return had been submitted.

Restart Grants

A new set of Restart Grants were announced, focusing on supporting businesses within the non-essential retail, hospitality and leisure sectors that have been required to close.
Non-essential retail businesses can claim grants of up to £6,000 per premises.
Hospitality, accommodation, leisure, gym and personal care businesses can claim up to £18,000 per premises.

Business Rates

The business rates holiday has been extended from 31 March 2021 to 30 June 2021 for retail, hospitality and leisure businesses.
From July onwards, the business rates for these businesses will then be discounted by two-thirds for the rest of the 2021/2021 tax year.

VAT for Hospitality and Tourism Sector

The 5% reduction in VAT for the UK’s hospitality and tourism businesses has been extended from March until 30 September 2021

From October 2021, the rate will then rise to 12.5% for six months before returning to 20% from 1 April 2022.

Stamp Duty Land Tax (SDLT)

The Stamp Duty holiday in England has been extended until 30 June 2021, with SDLT no longer payable on the first £500,000 of all property purchases.
After 30 June 2021, the nil-rate threshold for SDLT will be increased to £125,000 until 30 September 2021, before reverting back to it’s normal threshold of £250,000 from 1 October 2021.

Mortgage Guarantee Scheme

A new low-deposit mortgage guarantee scheme has been announced, allowing individuals to benefit from Government-backed 95% loan-to-value mortgages on properties up to the value of £600,000.
The scheme is available to all new mortgages up to 31 December 2022.

Apprenticeship Schemes

The financial incentive to hire new apprentices will increase from £1,500 to £3,000 per apprentice from April 2021.

Taxation of Individuals

The tax-free Personal Allowance will increase to £12,570 in April 2021 (currently £12,500) will then be frozen at this level for the next five years, up to April 2026.
The higher-rate tax threshold will be increased to £50,270 in April 2021 (currently £50,000) and will then also be frozen until April 2026.
The National Insurance contributions Upper Earnings Limit and Upper Profits Limit will remain aligned to the higher rate income tax threshold at £50,270 for these years.
The Chancellor confirmed that the IHT tax-free thresholds, Pension lifetime allowance and Capital Gains Tax annual exemption (£12,300) will all be frozen at their current levels until April 2026.

Taxation of Companies

Corporation tax rates will increase from 19% to 25% in April 2023.
However, a new Small Profits Rate of 19% for Companies with profits below £50,000 will be introduced, and for Companies with profits between £50,000 and £250,000, a new marginal rate will be introduced.
A new ‘Super Deduction’ tax relief has been introduced to encourage capital expenditure between 1 April 2021 and 31 March 2023, allowing Companies to deduct 130% of the cost of new plant and machinery investments. This relief is only available for Companies and not available for sole traders or partnerships.
The utilization of trading losses for Companies was expanded, allowing businesses to carry back trading losses to the previous three tax years, an extension of the current rules which allows businesses to carry back losses to the previous tax year.