BUDGET: WHAT YOU NEED TO KNOW
SELF-EMPLOYMENT INCOME SUPPORT SCHEME: FOURTH SEISS GRANT:
This will be worth 80% of trading profits for three months, February, March and April, capped at £7,500. Applications will open in April - exact date to be confirmed.
However, access to the grant has widened as previously you must have filed a tax return for 2018/19 to apply. Whereas now those who’ve filed their tax returns for 2019-20 by mid- night on Tuesday 2 March 2021 are also eligible. BUT self-employed company directors who pay themselves in div- idends rather than PAYE were again excluded from support.
FIFTH SEISS GRANT:
This will be available from May onwards, which will also be worth three months of average profits and will be open to claims from late July.
However, this extra grant is aimed at supporting those most affected by the pandemic. This means: • for those whose turnover has fallen by 30 per cent or more will continue to receive the full 80 per cent.
• but those whose turnover has fallen by less than 30 per cent will receive a reduced grant of 30 per cent
UNIVERSAL CREDIT:
£20 uplift in Universal Credit worth £1,000 a year to be extended for another six months WORKING TAX CREDIT:
Working tax credit claimants will get £500 one-off payment MINIMUM WAGE: Minimum wage to increase to £8.91 an hour from April CORONAVIRUS JOB RETENTION SCHEME (FURLOUGH):
The UK Government will continue to pay 80% of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month, up to the end of June 2021.
For periods in July, CJRS grants will cover 70% of employ- ees’ usual wages for the hours not worked, up to a cap of £2,187.50. In August and September, this will then reduce to 60% of employees’ usual wages up to a cap of £1,875.
You will need to continue to pay your furloughed employees at least 80% of their usual wages for the hours they do not
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work during this time, up to a cap of £2,500 per month. This means, for periods between July and September, you will need to fund the difference between this and the CJRS grants yourself. You can also top up wages above the 80% if you wish, but you are not required to do so.
You must continue to pay the associated Employer National Insurance contributions and pension contributions on subsidised furlough pay from your own funds.
CJRS eligibility from May: For periods from 1 May 2021 onwards, you will be able to claim for eligible employees who were employed by you and on your PAYE payroll on 2 March 2021. This means you must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 2 March 2021, notifying us of earnings for that employee.
You and your employees do not need to have benefitted from the scheme before to make a claim, as long as you meet the eligibility criteria.
PERSONAL TAX:
• No changes to rates of income tax or national insurance • Personal income tax allowance to be frozen at £12,570 from 2022 to 2026
• Higher rate income tax threshold to be frozen at £50,270 from 2022 to 2026
• The adult ISA annual subscription limit for 2021-22 will remain unchanged at £20,000.
• No changes to inheritance tax or lifetime pension allowance or capital gains tax allowances
• A new mortgage guarantee scheme will enable all UK home- buyers secure a mortgage up to £600,000 with a 5% deposit.
• Stamp duty holiday extended to June, with no levy on sales of under £500,000
BUSINESS TAX:
• No changes to VAT rate • Tax breaks for firms to ‘unlock’ £20bn worth of business investment
• Firms will be able "deduct" investment costs from tax bills, reducing costs by 130%
• Incentive grants for apprenticeships to rise to £3,000 • Business rates holiday for firms in England to continue until June with 75% discount after that
• Corporation tax to rise from 19% to 25% in April 2023 • Rate to be kept at 19% for companies with profits of less than £50,000
• Extension to loss carry back rules worth up to £760,000 per company.
• Small and medium-sized employers in the UK will continue to be able to reclaim up to two weeks of eligible Statutory Sick Pay (SSP) costs per employee from the Government.
MARCH 2021
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