What does the Budget mean for me?

The Chancellor Rishi Sunak presented us with his Spring Budget on Wednesday. What does the budget mean for me? We here you shout! Well we’ve put it into simple terms for you.

Coronavirus Job Retention Scheme (Furlough)

This was expected to end at the end of April but has now been extended until the end of September 2021. From now until the end of June 2021 will remain unchanged with the employee getting 80% of the wages and the employer only being asked to contribute tax and NI.

This will change in July when the state will pay 70% of wages and the employer will pay the remaining 10%. Then in August and September the state will reduce their contribution to 60% with the remaining 20% coming from the employer.
All other conditions remain unchanged.

SEISS – Self Employed Income Support Scheme

The 4th grant will be available from April but a firm date has not yet been announced.

The only change for the 4th grant is that they may now accept people who have submitted a 2019/2020 tax return. This may mean that an extra 600,000 people could now be eligible.

It has been confirmed that a 5th grant is also being made available. This grant will cover May to September.

This grant will be determined by a turnover test:
– If your turnover’s fallen by 30% or more.. you’ll be able to claim the full grant worth 80% of three months’ average trading profits, capped at £7,500.
 If your turnover’s fallen by less than 30%… you’ll be able to claim a grant worth 30% of three months’ average trading profits, capped at £2,850.

This grant can be claimed from late July however no other details have yet been made available.

VAT

The 5% reduced rate of VAT for the tourism and hospitality sector will be extended for six months.

It will now last until the end of September, with an interim rate of 12.5% for another six months after that.

A New Restart Grant

A new Restart Grant will launch in April to help businesses. These will be available in England an will be worth up to £6,000 per premises for non-essential retail businesses and up to £18,000 per premises for hospitality, accommodation, leisure, personal care and gym businesses.

Recovery Loan Scheme

A Recovery Loan Scheme will provide lenders with a guarantee of 80% on eligible loans between £25,000 and £10 million. This will launch on 6 April 2021 and will be open to all businesses, including those who have already received support under the exiting coronavirus guaranteed loan schemes.

Income Tax Thresholds

Income tax thresholds have been frozen after a rise this April.
The tax threshold for standard rate tax payers will rise from £12,500 to £12,570 in April 2021 and remain there until April 2026.
The higher rate tax threshold will rise by £270 from £50,000 to £50,270 from April 2021 and will remain there until April 2026.

Universal Credit Uplift

The Universal Credit uplift of £20 per week will continue for a further six months. Working tax credit claimants will get equivalent support for a further six months.
The suspension of the Universal minimum income floor has also been extended until August which is great news for may Self-Employed claimants.

Stamp Duty Holiday

The current stamp duty holiday (in England and Northern Ireland) will be extended until the end of June.
Between the end of June and the end of September the point at which you start paying stamp duty will be cut to £350,000 before returning to the usual £125,000 after that.

New Mortgage Scheme

A new mortgage scheme to help buyers with a 5% deposit will be launched. It will start from April and several major lenders have already agreed to take part.

Pensions

The pensions lifetime allowance and the thresholds for capital gains tax and inheritance tax will also be frozen. They will all stay the same until April 2026.

Contactless Payments

The limit for contactless payment will rise from £45 to £100. This was with immediate effect however it will take longer for retailers to implement the increased limit.

Alcohol and Fuel Duty

Alcohol and fuel duty will be frozen.

We hope that you have found this helpful and now have a better understanding of what the budget means for you. Further information is available on the government website https://www.gov.uk/government/news/budget-2021-what-you-need-to-know.

Also please remember that for any queries you may have we will be happy to help. https://www.csbookkeepingservices.co.uk