On 3rd March 2021 Chancellor Rishi Sunak presented his second budget. With the country on its knees economically, and many people suffering severe financial hardship, you may feel that he had his hands tied before he even started.
The Chancellor stated that his Budget was aimed at protecting businesses, through the pandemic, fixing the public finances, and start to build the future economy.
So what did the Chancellor do?
The Chancellor confirmed that the furlough scheme would be extended until September 2021 to support jobs through the crisis.
He also confirmed that the Self-Employment Income Support Scheme (SEISS) has also been extended, with two further grants this year. Claimable by the self-employed who have filed their tax return for 2019/20 by midnight on 2 March 2021, these grants are also available to those newly self-employed from 6 April 2019.
The stamp duty nil-rate band on residential properties in England up to £500,000 will continue until the end of June. It will taper to £250,000 until the end of September, and then return to the usual level of £125,000 from 1 October.
To support businesses as they re-open following lockdown, £5 billion will be made available in restart grants. Non-essential retail businesses re-opening first will be eligible for up to £6,000 but the leisure and hospitality sectors, which have been worse affected and will re-open later, will be eligible for up to £18,000.
Hospitality and leisure businesses will also pay no business rates for the next three months, then rates will be discounted for the remaining nine months of the year.
The Chancellor has also extended the 5% VAT rate until 30 September and then it will be set at 12.5% from 1st October 2021 to 31 March 2022 and then will revert to 20% from 1 April 2022! So not particularly simple or uncomplicated, but very welcome for all VAT registered businesses in hospitality.
However, the rate of corporation tax will increase to 25% in April 2023 for companies with profits over £250,000, whilst retaining a Small Profits Rate of 19% for companies with profits of £50,000 or less.
Turning to duties, tax on beer, wine, cider and spirits has been frozen while fuel duty will also remain frozen for an 11th consecutive year.
Mr Sunak also introduced green measures, including a new national infrastructure bank, which will open in Leeds with £12 billion capitalisation from the government, which will also offer a green retail savings product.
He also confirmed the location of the eight Freeports in England – one of these will be in Teeside. Freeports are special economic zones with favourable tariffs and lower taxes to make it easier and cheaper to do business.
Mr Sunak also announced that a large part of the Treasury function would move up from London to Darlington. The new base, which Chancellor Rishi Sunak announced in his Budget, will be home to 750 senior civil servants.
So some good news for the North of England – is this the start of “levelling up” by the government?
We shall be issuing a newsletter via email in due course but the link below will direct you to the full details
https://www.gov.uk/government/news/budget-2021-what-you-need-to-know
