As Chancellor Rishi Sunak announces his bounce back Budget in the House of Commons, we take a quick look at the key points he has set out to help restart the UK as we ease out of the lockdown.
Restarting the United Kingdom
The UK economy is forecast to return to pre-COVID levels by mid-2022. With the UK to borrow a peacetime record of £355bn this year, here is where that will be put to use.
Support initiatives
- Furlough Scheme and SEISS to be extended until the end of September
- Employer subsidy of 10% in July and 20% in August and September
- Fourth and fifth SEISS grants from April to September of up to 80% depending on loss of turnover. This is now available to anyone who submitted a 19/20 tax return!
- Universal credit uplift will continue for an extra 6 months
- National Living Wage to increase to £8.91 in April
- The apprentice incentive payment has been doubled to £3000 per placement for apprentices of any age
- New restart grant in April for non-essential retail of up to £6k per premises. Hospitality and Leisure sectors including personal care will receive up to £18k per business
- Recovery loan scheme for any size business can be applied for loans of £25,000 – £10m – this comes with a government guarantee of 80%
- 100% business rates holiday for April – June then down to 66% discount for all eligible businesses
- VAT at a 5% reduced rate extended to 30th September with an interim rate of 12.5% for further 6 months.
- Stamp duty extension on nil rate band to 30th June on purchases up to £500k
- Mortgage guarantee due to launch next month with 5% deposit mortgages backed by a government guarantee.
Tax Changes
- Personal tax allowances will be frozen at £12,500 for this year – up to £12,570 next year and frozen until 2026
- Thresholds for VAT, Capital gains and IHT will stay the same.
- From April 2023, Corporation Tax will increase to 25%. Small profits rate of 19% for profits £50,000 or under. Taper up to £250,000 before full 25% rate
- Tax losses – allowing to carry back for 3 years
- Business investment for the next 2 years – any company investing can reduce their tax bill by 130%!
- No increases to alcohol duty or fuel duty
- Business schools being launched with subsidised costs of up to 90% to assist with innovation and business growth.
We will be sharing more details about some of these key points over the coming weeks but if you have any questions in the meantime please reach out to our team. You can find all of our contact details here.