The Chancellor, Rishi Sunak has announced his 2021 budget.
The Chancellor, Rishi Sunak, has announced the 2021 budget, including further COVID-19 measures.
What You Need to Know
- The Coronavirus Job Retention Scheme has been extended until September 2021.
- The Self Employed Income Support Scheme has also been extended until September 2021, with 600,000 more people who filed a tax return in 2019-20 now able to claim for the first time
- On VAT, the 5% reduced rate of VAT will be extended for six months to 30 September followed by interim rate of 12.5% for another six months. The standard rate will not return until April next year.
- More than doubling the legal limit for single contactless payments, from £45 to £100
- 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.
- To balance the need to raise revenue with the objective of having an internationally competitive tax system, the rate of Corporation Tax will increase to 25%, which will remain the lowest rate in the G7. In order to support the recovery, the increase will not take effect until 2023. Businesses with profits of £50,000 or less, around 70% of actively trading companies, will continue to be taxed at 19% and a taper above £50,000 will be introduced so that only businesses with profits greater than £250,000 will be taxed at the full 25% rate.
- Beginning April 2021, the new super-deduction will cut companies’ tax bill by 25p for every pound they invest in new equipment.
- Extension of the Film & TV Production Restart scheme in the UK
- The £375 million UK-wide ‘Future Fund: Breakthrough’ will invest in highly innovative companies such as those working in life sciences, quantum computing, or clean tech, that are aiming to raise at least £20 million of funding.
In addition to the measures affecting businesses, a range of other measures were announced including:
- An extension to the temporary cut in Stamp Duty Land Tax in England and Northern Ireland until September will support the housing market and protect and create jobs.
- A new mortgage guarantee scheme will enable all UK homebuyers secure a mortgage up to £600,000 with a 5% deposit.
- £100 million for a new Taxpayer Protection Taskforce to crack-down on COVID fraudsters who have exploited UK Government support schemes.
- Northern Ireland will benefit from the Corporation Tax exemption for the Northern Ireland Housing Executive, Northern Ireland’s biggest landlord.
- Almost half of the £400 million New Deal for Northern Ireland funding has been allocated, subject to business cases, to: new systems for supermarkets and small traders to manage new trading arrangements; building greater resilience in medicine supply chains; promoting Northern Ireland’s goods and services overseas; and supporting skills development.
- £5 million to extend the Tackling Paramilitary Programme in 2021-22.
Read the Full Budget 2021 announcement