Latest Budget Announcements
Rishi Sunak has made some interesting announcements during the annual budget today and we have outlined the most significant information
The furlough scheme that has been in place since March last year has been extended once again until the end of September.
Employees will continue to receive at least 80% up until the scheme ends, however employers will be expected to contribute 10% in July and 20% in August & September.
With this in mind, employers will be able to reclaim 80% of employees wages up until July at which point they will be able to reclaim 70%, decreasing to 60% throughout August & September.
The government have announced today that there will be a fourth & fifth SEISS grant available for those self employed affected by Coronavirus.
The fourth grant will cover a three-month period from the start of February until the end of April and will be 80% of your average monthly trading profits, as was the case with the first 2 SEISS grants.
The fifth grant is due to cover the three-month period from May – July but will be a little different.
If your turnover has fallen by 30% or more due to Coronavirus then you can claim 80% of your average monthly trading profits, however, if your turnover has fallen by less than 30% then you will be eligible to claim 30% of your average monthly trading profits.
There will be additional grants issued to businesses to help guide them out of lockdown.
Non essential businesses and retail will receive grants of up to £6000 and businesses in leisure and hospitality who have been severely affected will receive grants of up to £18,000.
Recovery Loan Scheme
There will be a new recovery loan scheme launched in April to replace the Bounce Back and CBILS loan schemes that come to an end on 31st March.
The new recovery loan scheme will enable businesses to borrow between £25,000 – £10,000,000, 80% of which will be guaranteed by the government.
Business Rates Holiday
The business rates holiday will be extended for the first 3 months of the new tax year from April – June and will then be discounted for the remainder of the tax year so that businesses will only have to pay two thirds of their normal business rates.
VAT for Hospitality
Given the sever impact that the pandemic has had on the hospitality industry, the chancellor has announced that VAT will continue at the reduced rate of 5% up until the end of September 2021 and will then be increased to 12.5% up until the beginning of April 2022 at which point it will go back to the standard 20%.
Corporation Tax is set to be increased from 19% to 25% from April 2023 but there will be a new ‘small profits rate’ introduced which will mean that companies who make a profit of £50,000 or less will continue to be liable to the current rate of 19% Corporation Tax.
Only businesses with profits of £250,000 or above will be eligible to pay the full 25% Corporation Tax when the increase is implemented and profits between £50,000 & £250,000 will be subject to rates between 19% and 25% based on a tier system that will be introduced.
The stamp duty holiday for home buyers is being extended for a further three months until the end of June.
Houses up to the value of £500,000 will continue to be free from the tax until then, at which point the value of homes free from stamp duty will decrease to £250,000 until the end of September.
From the 1st October, the value of homes free from stamp duty will revert back to £125,000, as it was prior to the pandemic.
The Chancellor also confirmed a new scheme to provide mortgages to home buyers who put forward just a 5%, with a government guarantee ‘to help generation rent become generation buy’.