The Chancellor, Rishi Sunak, delivered the 2021 Budget on 3 March 2021. Our specialist Personal and Corporate Tax Teams have summarised the key announcements below, with a full report to be published on Thursday 4th March 2021.

Page last updated 3 March 2021, 2pm by Bhimal Hira and Nikhita Sagar. This summary is generally based on Press Releases and Reports issued immediately after the Budget on 3 March 2021 and will be added to over the next few days as more details emerge. These proposals may be amended. Whilst every care has been taken in the preparation of this article, it may contain errors and/or omissions. Some announcements may be subject to state aid approval. Always seek professional advice before taking any action.

KEY POINTS

• Furlough / Coronavirus Job Retention Scheme (CJRS) – Extended until the end of September. Employees will continue to receive 80% of their wages until the scheme ends, but firms will be asked to contribute 10% in July and 20% in August and September as the scheme is gradually phased out.
• Self-Employment Income Support Scheme (SEISS) – Support for the self-employed will continue with a 4th grant covering February to April, and a 5th grant from May, worth 80% of average trading profits up to £7,500. Newly self-employed who filed 19/20 tax returns by midnight on 2 March 2021 can claim 4th and 5th SEISS grants.
• Business rates relief – 100% discount to be extended to the end of June. This will be followed by 66% business rates relief for the period from 1 July 2021 to 31 March 2022, capped at £2 million per business for properties that were required to be closed on 5 January 2021, or £105,000 per business for other eligible properties.
• 5% reduced rate of VAT – 5% reduced rate of VAT for the hospitality and tourism sectors to be extended for 6 months, to the end of September, and will only go up to 12.5% after that, before returning to 20% next April.
• Corporation tax – To increase from April 2023 from 19% to 25%, but companies with profits under £50,000 will remain at 19%. Corporation tax will be tapered for businesses with profits between £50,000 and £250,000. Read more.
• Carry back losses for businesses – The trading loss carry-back rule will be temporarily extended from the existing one year to three years. This will be available for both incorporated and unincorporated businesses. Read more.
• Super-deduction – A 130% upfront capital allowances super-deduction for investment in plant and machinery. The super-deduction will allow companies to cut their tax bill by up to 25p for every £1 they invest. Read more.
• A new Recovery Loan Scheme – Bounce-back and other Coronavirus loans for businesses will be replaced by a new UK-wide Recovery Loan Scheme, 80% guaranteed by the government. Loans of between £25,001 and £10 million will be open to all UK businesses. The scheme launches on 6 April and is open until 31 December, subject to review. Read more.
• £5 billion for new Restart Grant – One-off Restart Grants will give businesses up to £6,000 per premises for non-essential retail businesses and up to £18,000 per premises for hospitality and other sectors that are opening later. The Restart Grant will be administered by local authorities.
• Research & Development (R&D) Tax Relief – The government will carry out a review of R&D tax relief. Read the consultation. As previously announced, for accounting periods beginning on or after 1 April 2021, the amount of SME payable R&D tax credit that a business can receive in any one year will be capped at £20,000 plus three times the company’s total PAYE and NICs liability, in a bit to deter abuse of the scheme.
• Stamp duty – The stamp duty holiday on properties worth up to £500,000 will be extended from the end of March until the end of June, then no duty on homes worth up to £250,000 for another three months. Threshold returns to the usual level of £125,000 from October 2021.
• Mortgage guarantee – Government will guarantee 95% mortgages to help those who can only afford a 5% deposit.
• HMRC task force – Over 1000 investigators to be hired to tackle tax avoidance and fraud in COVID support schemes.
• Personal taxes – Increase to £12,570 from April 2021. Personal income tax thresholds will be frozen from next year until 2026, at £12,570 for the basic rate and at £50,270 for the higher rate. Thresholds for inheritance tax, pensions lifetime allowance and capital gains tax thresholds are also being frozen.
• Enterprise Management Incentives (EMI) – Consultation into the EMI scheme to help them recruit and retain the talent they need to scale up. Read the consultation.
• Help to Grow – Management will give the leaders of 30,000 SMEs access to world-class training on everything from financial management to marketing. Register here.
• Fuel duty – to remain frozen for the eleventh consecutive year.
• Alcohol duty – to remain frozen for the second year in a row.
• Apprenticeships and traineeships –
  • apprenticeship hiring incentive in England extended to September 2021 and payments for hiring new apprentices are being doubled to £3,000.
  • £126m will be invested to triple the number of new traineeships.

OTHER KEY ANNOUNCEMENTS

• VAT deferral – As previously announced, instead of paying the full deferred VAT outstanding by 31 March 2021, businesses can spread what they owe over up to 11 smaller monthly payments from this month. Businesses can join the service online without needing to contact HMRC. The service opened on 23 February 2021 and will close on 21 June 2021. Read more.
• Closed Business Lockdown Payments (CBLP) – As previously announced the Closed Business Lockdown Payment (CBLP) scheme provides further support for businesses which are legally required to close as a result of COVID-19 restrictions. Businesses in England which are legally required to close have been able to claim one-off grants of up to £9,000 per premise. Read more.

This summary is generally based on Press Releases and Reports issued immediately after the Budget on 3 March 2021. These proposals may be amended. Whilst every care has been taken in the preparation of this article, it may contain errors and/or omissions. Some announcements may be subject to state aid approval. Always seek professional advice before taking any action.