Following the 2021 budget, T+G's expert panel sat down to offer you their top tips, to make the most of the pound in your pocket, in this video Q+A.
Catch up on all the Covid Support changes too below, to find out what they mean for you and your business. Don't forget if anyone needs free, one-to-one Covid advice and support, just give our dedicated Covid Team a call on 01995 600600.
The panel discussion includes thoughts on:-
House prices are set to rise, so is now the time to trigger a move?
Tax planning window closing , can you be a winner before year end?
Pension contribution benefits you might want to jump on, before April 5
COVID SUPPORT
Extended to September 30 2021, with employers to contribute 10% to the hours their employees do not work in July, rising to 20% in August and September.
SELF-EMPLOYED GRANTS (SEISS) FOUR AND FIVE
Those who had filed a tax return by March 2 2021 will be now eligible for both grants, including those previously ineligible as they had not filed a 2020 tax return
GRANT FOUR
If you are eligible, HMRC will contact you in mid-April to give you your personal claim date.
A fourth grant at 80% of average trading profits, with new eligibility including 2020 tax returns. The rest of the eligibility criteria remain unchanged.
Applications will not be open until late April for the fourth grant and close on May 31
Your eligibility for the scheme will now be based on your submitted 2019 to 2020 tax return. This may also affect the amount of the fourth grant, which could be higher or lower than previous grants you may have received.
GRANT FIVE
There will be a fifth and final grant covering May to September and you will be able to claim from late July if you are eligible for the fifth grant.The amount of the fifth grant will be determined by how much your turnover has been reduced in the year April 2020 to April 2021.
The fifth grant will be worth:-
80% of 3 months’ average trading profits, capped at £7,500, for those with a turnover reduction of 30% or more
30% of 3 months’ average trading profits, capped at £2,850, for those with a turnover reduction of less than 30%
Replaces Local Restriction Support Grants which will close March 31.
Non-essential retail businesses will get up to £6,000 per premises.
Tiered levels of grants based on both rateable value and your sector
Non-essential retail businesses will receive either £2667, £4,000 or £6,000, whilst Hospitality, Personal Care, Accommodation or Leisure businesses will receive £8,000 £12,000 or £18,000. No application process will be needed by those businesses who received LRSG closed, but other eligible business will need to apply with the process opening in April.
RATES VALUATION UNDER £15k £15-£51k ABOVE £51k
NON- ESSENTIAL RETAIL £2,667 £ 4,000 £ 6,000
PERSONAL CARE £8,000 £12,000 £18,000
HOSPITALITY £8,000 £ 12,000 £18,000
ACCCOMODATION £8,000 £ 12,000 £18,000
LEISURE £8,000 £ 12,000 £18,000
GYMS £8,000 £ 12,000 £18,000
Local Authorities will automatically issue grants to those businesses who have received local restriction grants, without a further application process.
Extensive guidance on each of the existing Local Restriction Support Grants can be found at the foot of this page, before they are replaced by the Restart Grants.
NON RATEABLE BUSINESSES
All English local authorities will share £425 million of discretionary grant funding, for those business who do not pay business rates. They will be provided guidance on March 22 on a further grant round, to follow on from the Additional Restrictions Grants currently being paid to March 31, and whether previous successful applications will be then be considered for a further payment, without an additional application process.
Each local authority will continue to run its own application process online, once guidance has been received from B.E.I.S. on any additional criteria it should consider for eligibility.
However local councils however were told on March 9, that they must spend the remaining funds from the previous rounds of the Additional Restrictions Grant, before any additional funds are released, as their pro-rata share of the £425m. Previous guidance from BEIS has told councils that they must ensure the A.R.G funding would provide support to March 2022.
In light of this from March10, some councils began to amend their previous eligibility criteria, to allow applications from those that received the Self-Employed Income Support Schemes, who they had previously deemed to be ineligible, other's more cautiously have chosen not to as yet.
BUSINESS RATES
The existing holiday on business rates has been extended to June 2021 for the retail, hospitality and leisure sectors. Business rates for the remainder of the financial year 2021/22 will then discounted be discounted by 66%.
Cut to 5% continues for hospitality, accommodation and attractions to September 30 and then an interim rate of 12.5% until March 31, 2022
MORTGAGES
The scheme is designed to help creditworthy households struggling to save for the higher mortgage deposits required by lenders in the current environment.
The government will underwrite seven year guarantees for 95% mortgage values up to £600,000, from April 2021 to December 2022, and lenders must offer a five year fixed rate product as part of their range of mortgages offered under the guarantee.
For this reason, a mortgage eligible for a guarantee under the scheme will need to:
• be a residential mortgage (not second homes) and not buy-to-let
• be taken out by an individual or individuals rather than an incorporated company
• be on a property in the UK with purchase value of £600,000 or less
• have a loan-to-value of between 91 per cent and 95 per cent
• be originated between the dates specified by the scheme
• be a repayment mortgage and not interest-only
• meet standard requirements in terms of the assessment of the borrower’s ability to pay
the mortgage, for example a loan-to-income and credit score test
MORTGAGE GUARANTEE SCHEME RULES
STAMP DUTY
The current holiday continues to June 30 2021 on properties up to £500,000.The nil rate band will be £250,000 until September 30 202, double its standard level, until the end of September before returning to the usual level of £125,000 from October 1st.
INCOME SUPPORT
Universal Credit £20 a week uplift extended to September 30 2021
A one-off payment of £500 to eligible Working Tax Credit claimants across the UK.
If you’re part of a working household that receives tax credits, you may be eligible for a new one-off payment of £500. The new payment is being introduced to provide extra support when the temporary increase in Working Tax Credit ends as planned on 5 April 2021.
You do not need to apply for the new payment. HMRC will contact you by text message or letter in April to confirm you are eligible. You do not need to contact HMRC.
This includes those who, on 2 March 2021, receive:
Working Tax Credit payments
both Working Tax Credit and Child Tax Credit payments
Child Tax Credit payments and are eligible for Working Tax Credit but do not get a payment because their income is too high
If you are eligible, you should receive your payment by 23 April 2021.
Business of any size can borrow £25,000 to £1m with the government guaranteeing 80% of the loans, which will be available up to the end of 2021.
This will be accompanied by asset and invoice finance between £1,000 and £10 million, to help businesses of all sizes through the next stage of recovery.
Once received, the finance can be used for any legitimate business purpose, including growth and investment.
The government guarantees 80% of the finance to the lender to ensure they continue to have the confidence to lend to businesses.
The scheme launches on 6 April and is open until 31 December, subject to review.
What type of finance is available?
Term loans and overdrafts will be available between £25,001 and £10 million per business.
Invoice finance and asset finance will be available between £1,000 and £10 million per business.
Finance terms are up to six years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years.
No personal guarantees will be taken on facilities up to £250,000, and a borrower’s principal private residence cannot be taken as security.
TAXATION
Corporation Tax to rise from 19% to 25% in 2023
New small business corporation rate under 50k profits at 19%
Tapered rates up to £250,000 profits when 25% full rate kicks in
Loss carry back of up to £2m can can be carried back for 3 years
Company's investing in the next two years to get a super deduction of tax of up to 130%.
The super-deduction allows companies to cut tax bills by up to 25p for every £1 they invest
as they can now reduce their tax bill by 130% on the sum they put in.
From 1 April 2021 until 31 March 2023, companies investing in qualifying new plant and machinery assets will be able to claim:
a 130% super-deduction capital allowance on qualifying plant and machinery investments
a 50% first-year allowance for qualifying special rate assets
INCOME TAX THRESHOLDS AND ALLOWANCES
Freezing allowance at £12,500 and then a rise to £12,570 from 2022 to 2026
Higher rate threshold at £50,270 from 2022-26
The additional rate threshold is fixed at £150,000.
The NICs Upper Earnings Limit and Upper Profits Limit will remain aligned to the higher rate threshold at £50,270 for these years
R&D TAX CREDIT SME's
Capped in any one year at £20,000 (plus 3 x the company’s total PAYE and NICs liability)
PERSONAL WEALTH
Capital Gains, Personal Savings, Inheritance Tax and Pensions barely got a mention in the budget, in fact pensions got the fewest mentions, 22, in a budget since 2015.
Financial Secretary to the Treasury Jesse Norman said: “We are making these announcements separately to the Budget, but still all on a single day, in order to give a range of important but less high profile measures greater visibility among Members of Parliament, tax professionals and other stakeholders, and greater scope for scrutiny by them.”
INHERITANCE TAX
Threshold will remain unchanged until 2026
LIFETIME ALLOWANCE
Remains at its current level of £1,073,100 until April 2026
ADULT ISA
Annual subscription limit for 2021-22 will remain unchanged at £20,000.
CAPITAL GAINS AND V.A.T.
Thresholds remain unchanged
DUTIES
Planned alcohol and fuel duties cancelled
Book in for a free financial health check with Dave Jones and our financial services team here.
ECONOMY AND LEVELLING UP
FREEPORTS
Low tax and favourable investment terms UK wide for the first 8 Freeports:- East Midlands Airport, Felixstowe & Harwich, Humber, Liverpool City Region, Plymouth, Solent, Thames and Teesside
LEVELLING UP £4.8 BILLION FUND
Prospectus published for local areas UK wide on how to submit bids for the first round of funding starting in 21-22.
TOWNS FUND
£1 billion funding for a further 45 towns in England supporting their long-term economic and social regeneration
Increase to £3,000 in the temporary cash bonus to businesses taking on an apprentice of any age. Currently, firms in England are given £2,000 for every new apprentice they take on under the age of 25, and £1,500 for those over 25, in addition to a second £1,000 grant they are eligible for.
£520M “HELP TO GROW SCHEME FOR SMEs
SME’s to get expert technology advice and discounted digital software or MBA-style management training commencing in the autumn. Register on www.gov.uk/helptogrow
Eligible SMEs will be given vouchers to get up to 50% off the purchase of new productivity-enhancing software, up to £5,000 each
A new online platform to offer free advice on technology that will help businesses to save time, reduce costs, and reach more customers.
Leading business schools will offer 50 hours of tuition with one-to-one support from a business mentor for 130,000 SME leaders, 90% funded by government
NATIONAL LIVING WAGE AND NATIONAL MINIMUM WAGE
On April 1, 2021 the National Living Wage will increase by 2.2% to £8.91 for workers aged 23 This is the first step towards the National Living Wage applying to workers aged 21 and over by 2024.
The government is also introducing increases between 1.5% and 3.6% to each of the National Minimum Wage rates for younger workers and apprentices.
GREEN ECONOMY
UK’s first “green gilt” £15 billion of green gilt issuance in the coming financial year, to help finance critical projects to tackle climate change and other environmental challenges, fund important infrastructure investment, and create green jobs across the UK.
Based in Leeds, and will aim to "finance green industrial revolution."
COMMUNITY OWNERSHIP FUND OF UP TO £150M
For community ownership of local businesses, which as an example will allow pub-goers to bid up to £250,000 of assistance to take ownership of a pub that otherwise may close.