UK Budget 2021 – Jobs, livelihoods, and business support
Super-deduction
- From 1 April 2021 until 31 March 2023, companies investing in new qualifying plant and machinery assets will benefit from a 130% first year capital allowance.
- A 50% first year allowance will also apply for qualifying special rate assets (including long life assets).
- Plant and machinery expenditure incurred under a hire purchase or similar contract must meet additional conditions to qualify for the super-deduction or special rate relief.
- A disposal factor of 1.3 applies to the disposal proceeds if an asset is sold, after claiming the super-deduction.
Coronavirus support – income and job protection
- The Coronavirus Job Support Scheme (CJRS) is extended to 30 September 2021 across the UK. Support for employees remains at 80% of usual pay for hours not worked; employers will be required to contribute 10% towards this from 1 July, increasing to 20% from 1 August.
- The Self Employment Income Support Scheme (SEISS) is also extended to 30 September 2021, with 600,000 more people who filed a tax return in 2019-20 now able to claim for the first time. A fourth grant will cover the period from 1 April to 30 June, then a fifth for the period from 1 July to 30 September.
- The fourth grant will continue to be worth 80% of three months’ average trading profits (capped at £7,500 in total); for the fifth grant, if turnover has fallen by less than 30%, only a 30% grant will be available (capped at £2,850 in total).
- Eligibility for the SEISS is now extended to include those who had filed their 2019/20 self-assessment tax returns by midnight on 2 March 2021.
- The temporary £20 per week increase to the Universal Credit standard allowance is extended for a further six months in Great Britain, until 30 September 2021, on top of the planned uprating. A one-off payment of £500 will be made to eligible Working Tax Credit claimants across the UK.
Coronavirus support – loan schemes and grants
- A new Recovery Loan Scheme will make loans to UK businesses available, for between £25,001 and £10 million, and for asset and invoice finance between £1,000 and £10 million.
- New Restart Grants will provide a one-off cash grant of up to £18,000 for hospitality, accommodation, leisure, personal care and gym businesses in England.
- 750,000 eligible businesses in the retail, hospitality and leisure sectors in England will benefit from business rates relief. 100% relief will be available from 1 April 2021 to 30 June 2021, then 66% until 31 March 2022. This relief will be capped at £2 million per business for properties required to close on 5 January 2021, or £105,000 per business for other eligible properties.
Coronavirus support – other taxation
- Extended carry-back of trading losses, for both companies and unincorporated businesses, will enable up to £2 million of losses to be carried back up to three years, in each of 2020-21 and 2021-22. A group cap will apply for companies that are members of a corporate group.
- The reduced VAT rate of 5% for hospitality, accommodation and attractions across the UK is extended until 30 September 2021, followed by a 12.5% rate for a further six months until 31 March 2022.
Coronavirus support – property market
- A new mortgage guarantee scheme will provide a Government guarantee to lenders offering 95% mortgages on homes valued up to £600,000, from 1 April 2021 to 31 December 2022.
- The temporary increase to £500,000 of the SDLT nil rate band for residential property is extended until 30 June 2021; this reduces to £250,000 from 1 July 2021 then returns to £125,000 from 1 October 2021.
Apprenticeships
- The apprenticeship hiring incentive in England is extended from 1 April 2021 to 30 September 2021, increasing to £3,000 per new apprentice hire.
- £126 million of funding will be provided for 40,000 more traineeships in England in the 2021/22 academic year, for 16-24 year olds.
We are still working through the detail relating to most of the announcements so you will appreciate the above is not tax advice. We will publish more information on the important measures as it becomes available. Please contact us with any specific queries.