Personal & Business Tax
- Personal Allowance – will increase to £12,570 from 6th April 2021 and remain at that level until April 2026.
- Higher Rate Tax Threshold – increases to £50,270 from 6th April 2021 and will remain at that level until April 2026.
- The National Insurance Primary Threshold will increase to £9,568 from 6th April 2021.
- Employment Allowance – remains at £4,000.
- National Living Wage – Increases to £8.91 per hour from 1st April 2021.
- Corporation Tax – increases to 25% from April 2023 on profits over £250,000. The tax rate on profits below £50,000 will remain at 19%. Profits between £50,000 and £250,000 will be taxed on a sliding scale.
- Between 1st April 2021 and 31st March 2023, companies investing in qualifying new plant and machinery will be eligible for a 130% first-year capital allowance.
- VAT Payment Deferral Scheme – VAT payments deferred from 2020 can now be made by monthly instalments. Businesses need to apply for the deferral scheme before the end of June 2021. Payments of the deferred VAT can be made over 2 to 11 months, depending on when application is made.
- VAT Rate – Hospitality & Tourism – The temporary reduced 5% VAT rate is extended until 30th September 2021. A 12.5% rate will then apply until 31st March 2022, at which point the rate will revert to the standard 20%.
Loss carry back
- The trading loss carry back rule is temporarily extended from one year to three years. This is available for both incorporated and unincorporated businesses and will allow losses to be carried back and offset against previous years profits.
- The temporary increase of the nil rate band to £500,000 is extended to 30th June 2021, meaning property buyers will not pay and stamp duty on properties up to £500,000.
- From 1st July to 30th September 2021 the nil rate band will reduce to £250,000; returning to £125,000 from 1st October 2021.
- The government will also introduce a mortgage guarantee scheme in April 2021, providing a guarantee to lenders who offer mortgages with a deposit of just 5% on homes up to £600,000 in value.
Capital Gains Tax & Inheritance Tax
- The Capital Gains Tax annual exemption will remain at £12,300 until April 2026.
- Inheritance Tax threshold and the residence nil-rate band will remain at the current levels of £325,000 and £175,000 until April 2026.
- Coronavirus Job Retention Scheme (CJRS) – is extended until 30th September 2021. The level of support will remain at 80% of an employees’ usual wages, caped at £2,500 per month, until 30th June 2021. This will reduce to 70% for July and 60% for August and September.
- Employers will need to continue to pay any Employer National Insurance and pension contributions.
- For claims from 1st May 2021, employees must have been employed on 2nd March 2021 and have had a Real Time Information submission between 20th March 2020 and 2nd March 2021.
- Self-employed Income Support Scheme (SEISS) – A fourth grant of 80% of three months’ average trading profit will be available from late April. This is capped at £7,500. This will take into account tax returns for 5th April 2020, so will be available to those who became self-employed during 2019/20.
- A fifth and final SEISS grant for the period May to September will be available from late July. Eligibility will be determined by a turnover test. Where turnover has fallen by 30% or more the grant will remain at 80%, capped at £7,500. If turnover has fallen by less than 30% the grant will be 30%, capped at £2,850.
Grants & Other Support
- Apprenticeships – Employers who take a new apprentice between 1st April 2021 and 30th September 2021 will receive a grant of £3,000 per apprentice. This is in addition to the existing £1,000 grant for all new 16 to 18 year-old apprentices of those aged under 25 with an Education, Health and Care plan.
- Restart Grants – grants of up to £6,000 per premises for non-essential retail businesses and £18,000 per premises for hospitality, leisure, and personal care businesses will be provided.
- Recovery Loan Scheme – Available from 6th April 2021. The government will guarantee 80% of eligible loans between £25,000 and £10 million.
- Business Rates Relief – Eligible retail, hospitality and leisure premises in England will receive 100% business rates relief between 1st April 2021 and 30th June 2021. 66% relief will be given from 1st July 2021 to 31st March 2022, subject to a cap.
- Universal Credit – the current increase in the level of universal credit has been extended for a further six months.