UK Spring Budget 2021: 19 Things You Need to Know About the Budget

Jordan Macey

UK Spring Budget 2021: 19 Things You Need to Know About the Budget Guide

Here are the top 19 things you need to know about the UK Spring 2021 Budget Announcement.

Covid-Relief

**1. Furlough scheme extended to September 2021

**

The government has committed to continue paying 80% of employees' wages when they are unable to work, with employers not having to make any contributions until July 2021.

**2. Support for the self-employed extended to September 2021

**

As part of the covid support package from the government, the the Chancellor confirmed that he will extend the self employed income support scheme with those submitting a self assessment tax return before midnight 2nd March being eligible.

**3. Universal Credit uplift to stay for 6 months

**

The £20 weekly uplift in Universal Credit has been extended for a further 6 months, with Working Tax Credit claimants being eligible for a £500 one-off payment.

Personal Tax

4. Income/personal tax thresholds frozen

The chancellor has announced that there will be no changes to rates of income tax, National Insurance or VAT and the corresponding tax free allowances and thresholds are to be frozen for 5 years.

5. Stamp duty holiday extended to September 2021

House purchases/sales of less than £500,000 will continue to have no tax charged up to 30th June 2021.

6. Inheritance, pensions and capital gains allowances to be frozen

Plans were revealed that Inheritance tax thresholds, pensions lifetime allowances and annual capital gains tax exemptions to be frozen at 2020-2021 levels until 2025-26.

7. Duty on alcohol and fuel frozen

Duty on alcohol and fuel continues to be frozen for the next 12 months and planned increases are cancelled.

Company Tax

8. Corporation Tax to increase to 25%

The announcement has revealed that the government will raise the current rate of corporation tax of 19% to 25% in April 2023 for businesses with profits exceeding £250,000. Businesses with profits less than £50,000 will be charged at a small profits rate matching the current rate of 19%.

9. New ‘super deduction’ of 130% tax relief on investments

A new initiative announced by the Chancellor sees that a new super deduction will be introduced allowing businesses to claim 130% of investment costs against their taxable profits reducing their tax payable for qualifying plant and machinery assets.

10. Additional Corporation Tax relief for loss-making businesses

Businesses making a loss in the financial years 20/21 and 21/22 will be able to carry back their losses for an extended 3 year period of up to £2m.

11. Lowered VAT for the hospitality sector extended until September

Businesses within the hospitality sector can continue to utilise the lowered 5% VAT rate until September with then an interim rate of 12.5% applying for 6 months before returning to the standard rate of VAT.

12. Business rates holiday to continue until June

Businesses will continue to receive a holiday of paying rates in England until June, after which a 75% discount will be applied.

Business Funding & Grants

13. Business restart grant announced for those businesses that have had to close

Businesses that were forced to close their doors as part of the ongoing covid restrictions will be able to access grants upon re-opening. This has been announced at £6,000 per premises for non-essential outlets due to re-open in April and £18,000 for gyms, personal care providers and other hospitality and leisure businesses that will be required to open later down the line.

14. A Recovery Loan Scheme is set to launch in April

The Recovery Loan Scheme ensures businesses of any size can continue to access loans and other kinds of finance up to £10 million per business once the existing Covid-19 loan schemes close, providing support as businesses recover and grow following the disruption of the pandemic and the end of the transition period.

Employment & Training

15. Minimum wage increase

The minimum wage will increase to £8.91 an hour from April onwards.

16. Increased incentives for apprenticeships

The apprentice hiring incentive in England was extended to September 2021 and the payment increased to £3,000. A flexi-apprenticeship scheme was also announced that will allow apprentices to work with multiple employers in a sector.

17. Announcement of the Help to Grow Programme

The Chancellor announced a new Help to Grow scheme to offer up to 130,000 companies across the UK a digital and management boost. The programme aims to help small and medium-sized businesses across the UK learn new skills, reach new customers and boost profits by assisting with the provision of training in key areas such as management and utilising digital technologies.

IR35

18. No mention of IR35

There was no mention of the planned changes to the current IR35 legislation suggesting that the previously postponed plans will go ahead in April 2021.

Mortgages

19. A new Mortgage Guarantee Scheme to assist with 5% deposits

A new mortgage guarantee scheme will be introduced in April 2021. This scheme will provide a guarantee to lenders across the UK who offer mortgages to people with a deposit of just 5% on homes with a value of up to £600,000. Under the scheme, all buyers will have the opportunity to fix their initial mortgage rate for at least five years should they wish to.

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UK Spring Budget 2021: 19 Things You Need to Know About the Budget

Jordan Macey

March 19, 2022

UK Spring Budget 2021: 19 Things You Need to Know About the Budget Guide

Limited Company Expenses Guide

Free Download: Limited Company Expenses Guide

Download Now ↓
Small Business Accounting

Covid-Relief

**1. Furlough scheme extended to September 2021

**

The government has committed to continue paying 80% of employees' wages when they are unable to work, with employers not having to make any contributions until July 2021.

**2. Support for the self-employed extended to September 2021

**

As part of the covid support package from the government, the the Chancellor confirmed that he will extend the self employed income support scheme with those submitting a self assessment tax return before midnight 2nd March being eligible.

**3. Universal Credit uplift to stay for 6 months

**

The £20 weekly uplift in Universal Credit has been extended for a further 6 months, with Working Tax Credit claimants being eligible for a £500 one-off payment.

Personal Tax

4. Income/personal tax thresholds frozen

The chancellor has announced that there will be no changes to rates of income tax, National Insurance or VAT and the corresponding tax free allowances and thresholds are to be frozen for 5 years.

5. Stamp duty holiday extended to September 2021

House purchases/sales of less than £500,000 will continue to have no tax charged up to 30th June 2021.

6. Inheritance, pensions and capital gains allowances to be frozen

Plans were revealed that Inheritance tax thresholds, pensions lifetime allowances and annual capital gains tax exemptions to be frozen at 2020-2021 levels until 2025-26.

7. Duty on alcohol and fuel frozen

Duty on alcohol and fuel continues to be frozen for the next 12 months and planned increases are cancelled.

Company Tax

8. Corporation Tax to increase to 25%

The announcement has revealed that the government will raise the current rate of corporation tax of 19% to 25% in April 2023 for businesses with profits exceeding £250,000. Businesses with profits less than £50,000 will be charged at a small profits rate matching the current rate of 19%.

9. New ‘super deduction’ of 130% tax relief on investments

A new initiative announced by the Chancellor sees that a new super deduction will be introduced allowing businesses to claim 130% of investment costs against their taxable profits reducing their tax payable for qualifying plant and machinery assets.

10. Additional Corporation Tax relief for loss-making businesses

Businesses making a loss in the financial years 20/21 and 21/22 will be able to carry back their losses for an extended 3 year period of up to £2m.

11. Lowered VAT for the hospitality sector extended until September

Businesses within the hospitality sector can continue to utilise the lowered 5% VAT rate until September with then an interim rate of 12.5% applying for 6 months before returning to the standard rate of VAT.

12. Business rates holiday to continue until June

Businesses will continue to receive a holiday of paying rates in England until June, after which a 75% discount will be applied.

Limited Company Expenses Guide

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Limited Company Expenses Guide

Business Funding & Grants

13. Business restart grant announced for those businesses that have had to close

Businesses that were forced to close their doors as part of the ongoing covid restrictions will be able to access grants upon re-opening. This has been announced at £6,000 per premises for non-essential outlets due to re-open in April and £18,000 for gyms, personal care providers and other hospitality and leisure businesses that will be required to open later down the line.

14. A Recovery Loan Scheme is set to launch in April

The Recovery Loan Scheme ensures businesses of any size can continue to access loans and other kinds of finance up to £10 million per business once the existing Covid-19 loan schemes close, providing support as businesses recover and grow following the disruption of the pandemic and the end of the transition period.

Employment & Training

15. Minimum wage increase

The minimum wage will increase to £8.91 an hour from April onwards.

16. Increased incentives for apprenticeships

The apprentice hiring incentive in England was extended to September 2021 and the payment increased to £3,000. A flexi-apprenticeship scheme was also announced that will allow apprentices to work with multiple employers in a sector.

17. Announcement of the Help to Grow Programme

The Chancellor announced a new Help to Grow scheme to offer up to 130,000 companies across the UK a digital and management boost. The programme aims to help small and medium-sized businesses across the UK learn new skills, reach new customers and boost profits by assisting with the provision of training in key areas such as management and utilising digital technologies.

Limited Company Expenses Guide

What's Inside:

  • Allowable business expenses
  • Employee expenses
  • Travel expenses
  • Office & equipment expenses
  • Professional services expenses
  • General expenses
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Limited Company Expenses Guide

What's Inside:

  • Allowable business expenses
  • Employee expenses
  • Travel expenses
  • Office & equipment expenses
  • Professional services expenses
  • General expenses

IR35

18. No mention of IR35

There was no mention of the planned changes to the current IR35 legislation suggesting that the previously postponed plans will go ahead in April 2021.

Mortgages

19. A new Mortgage Guarantee Scheme to assist with 5% deposits

A new mortgage guarantee scheme will be introduced in April 2021. This scheme will provide a guarantee to lenders across the UK who offer mortgages to people with a deposit of just 5% on homes with a value of up to £600,000. Under the scheme, all buyers will have the opportunity to fix their initial mortgage rate for at least five years should they wish to.

Read More Guides below:

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