A quick round up of the main Budget announcements.
Furlough extended to September 80% of salary for hours not worked, workers must still be paid their full salary for hours they are working.
From July employers will be asked to contribute first 10% in July and then 20% in August of the employees’ furlough payment as well as the employers’ share of national insurance and pension contributions.
Two additional grants have been announced to cover February 2021 onwards.
Anyone whose turnover has fallen by less than 30% will not receive the full 80% grant.
Anyone who was not self-employed before April 2019 and therefore did not qualify for the earlier grants can now qualify for grants 4 & 5 on the back of the submitted 2019/2020 tax return figures provided the return was submitted by midnight 3 March 2021.
Loans and Grants
A new round of Recovery Loans is also being made available with an 80% Government backed guarantee.
Hospitality, retail, and leisure industry specifics.
Also Restart grants of up to £6,000 for shops and £18,000 for leisure and hospitality.
There is three-month full holiday from business rates for those ailing sectors and an 2/3rds holiday for the remaining nine months of 2021/22.
5% VAT rate on food and accommodation to stay until September after which it will rise to 12.5% until at least April 2022.
Income Tax Rates and Allowances
Many personal reliefs, including personal allowance, CGT exemption and pension allowances are frozen at their 2021/22 rates until 2026.
Stamp Duty Land Tax
The temporary SDLT nil rate band of £500K BRB is extended to 30 June and to £250K to end of Sept. Usual level from 1 Oct.
April 2023 will see a return to two rates of corporation tax. Companies with profits of less than £50,000 will pay 19% and those with profits over £250,000 will pay 25%. In between these two rates is an effective hybrid rate. Close Investment Holding Companies will be charged at the higher rate irrespective of profit levels.
If you own shares in a company which doesn’t actively trade speak to us now.
A new temporary Super Deduction will apply to capital allowance claims from April 2021 – 31 March 2023. This will give the business a deduction of 130% of capital expenditure costs on most new plant and machinery. Long life assets which would usually attract the 6% rate qualify for a 50% first year allowance. Annual Investment Allowance is still in place for the first £1M expenditure before1 January 2022.
Disposal proceeds will be adjusted where a sale of the asset is made, and if you do sell the asset timing may be important to avoid a balancing charge at the new higher rates in 2023.
Any business, whether company, sole trade or partnership can carry that loss back to offset against the earlier three years profits. For companies this applies to losses arising between April 2020 and March 2022, and is capped at £2M, and for unincorporated business the accounting perioded ended in 2021 and 2022 tax years. After this loss carry back will revert to the current one year.
If you’d like to speak with one of our team about anything in the Budget please call the office number.