Today the Chancellor set out his budget. As one would expect, it makes for grim reading when it comes to the levels of debt, unemployment, and so on. In this blog post, we will set out the major changes you should be aware of.
Furlough and Self Employment Support Grants
|Furlough Extension||Extended until September||The furlough scheme is extended until September enabling you to continue keeping on employees that you may have had to furlough.
It will continue to fund 80% of the employee’s wages until June, then 70% in July and 60% in August and September (but you must still actually pay the employee 80% throughout).
|Self Employment Support||Extended until September||Two more Self Employment support grants will be available over the next few months and into the summer. If you didn’t qualify for the Self Employment grants last year, you may be eligible for support this year as long as the Self Assessment was submitted so it’s worth checking.|
Employment & Training
|National Living Wage||Rises to £8.91||The National Living Wage is rising to £8.91 an hour (rates for other age groups/ apprentices can be found here).|
|Trainee’s & Apprentices||Apprentice Incentive Payments Doubled||If you are interested in taking on new trainees or apprentices, the government already has a number of schemes available here, and the Chancellor announced today that he is doubling the incentive payments to £3000 for taking on new apprentices (up to 30th September).|
|Business Owner Training||Help to Grow Training||The government announced two new schemes for businesses to get training which will launch in the autumn.
The first “Help to Grow Management” will give business managers/owners access to training and development with the government covering 90% of the costs.
The second, “Help to Grow Digital” will give businesses free training and a 50% discount on digital software.
Existing government education/support for business owners can be found here.
|Immigration Reform||System Reform||There will be reforms to the immigration system to make it easier to employ high-skilled workers from abroad.|
Loans, Grants, Business Rates and VAT
|Loans/Grants||New Loan Scheme and Grant Scheme||A new loan scheme will be available for businesses of any size to apply for loans of £25,000 to £10 million, until the end of this year.
New “Restart” Grants – Non-Essential Retail can apply for grants of up to £6000, and Hospitality and Leisure industries can apply for grants of up to £18,000.
|Business Rates||Rates holiday Extended to June||The business rates holiday has been extended until the end of June, and rates will then be a third of their normal level until April 2022.|
|VAT||Reduced Rate Continued||If you work in the hospitality or tourism sectors, the 5% reduced rate of VAT will continue until 30th September, and then rise to 12.5% for the rest of the financial year.
The threshold for registering for VAT will remain at £85,000 for the next 2 years.
|Corporation Tax||Rising to 25%||A big announcement by the Chancellor is that the rate of Corporation Tax will be increasing in 2023. This will go up from the current 19% to 25%.
However, if your profits are below £50,000 then you will continue to pay the 19%. If you have profits between £50,000 and £250,000 the tax rate will be tapered so you only pay the full 25% rate once you reach the £250,000 level of profit.
|Losses||New Carry Losses back 3 Years Introduced||If you make any losses, you can carry back those losses against any profits you’ve previously made, for up to three years (instead of the current one year) which will result in tax refunds (this will help with cash flow as you’ll be able to get a payment of cash from HMRC).|
|Capital Allowances||New “Super Deduction” Introduced||The government announced a new measure to encourage businesses who have savings, to invest them to grow their businesses.
There will be a new “super deduction” for the next two years where companies who invest in new plant and machinery e.g. cars, computers, factories, machines, will be able to claim 130% of the costs in that year to reduce their tax bills. It doesn’t look like this will apply to intangible assets e.g. patents, trademarks, franchise licenses, though.
(Please note that if you are a small business that invests in new research and development e.g. an advance in science and technology with a new product, you can already claim 230% of these costs against your business tax bill.)
Other Important Changes
|Income Tax Thresholds||Income tax thresholds Increased||The income tax thresholds will rise to £12,570 and £50,270 in April, but then will be frozen until 2026.
The national insurance thresholds will also rise very slightly.
Other thresholds like the annual exemption on capital gains and lifetime pension thresholds will be frozen.
|Stamp Duty||Stamp Duty holiday Extended||Stamp duty on new homes will remain at 0% for homes up to £500,000 until 30th June before the 0% rate band is lowered to 250,000 until the end of September and then returns to its pre-covid rate.|
|Free Ports||8 Free Ports||The government announced 8 new Free Ports which benefit from simpler planning, tax breaks, and funding for infrastructure, including one in Teesside, and a new ‘economic campus’ in Darlington.|
|Universal Credit||£20 a week Extended||The temporary rise in universal credit of £20 a week will be maintained until September.|
|Duties||Duties Frozen||Taxes on alcohol and fuel will both be frozen.|
|Culture||Extra Funding for Culture||There will be an extra £300 million in grants for culture businesses affected by Covid.|
|Investing||New Investment Product||If you make investments, you will be able to invest in a new savings product to support green infrastructure projects in the UK.|
Please note that these are the measures as we currently understand them, and as they have been announced by the Chancellor. As HMRC releases the supporting documents, new details may emerge and we will try to update this accordingly.