Budget 2021: top 5 things you need to know.
Rishi Sunak, the Chancellor, has confirmed some key changes that will impact you and your business. We are analysing the detail of the changes and we will update you very soon on what it means specifically for your business.
We feel that the Chancellor has listened to the concerns of business owners and their professional advisers and whilst the Treasury needs to balance the books, the good news is that the main tax rise (corporation tax) isn’t effective until 2023.
The ‘super deduction tax break’ (see below) looks very interesting and we will be looking more closely into this to see where our clients can benefit. Capital Gains Tax (CGT) rules appear to remain unchanged – but we will be checking the detail of the official budget report today.
The top 5 things you need to know today are:
1) Furlough extended until October 2021
This measure is helpful if your business needs ‘breathing space’ to enable your business and staffing levels to normalise steadily as the economy revs up after lockdown The scheme tapers with a 10% contribution expected by employers in July – and a 20% contribution in August and September. Speak to us for help in processing your new furlough claims accurately.
2) Corporation tax increase
Corporation tax will rise to 25% (up from 19%) in April 2023 – but only for firms with profits of more than £250,000. A new, ‘small profits rate’ will be established at 19% (as it is now) for firms with profits up to £50,000. In addition, the rate of 19% will taper up steadily to 25% for companies with profits above that level up to £250,000.
3) New ‘Recovery Loan’ Scheme
A new loan scheme (separate from bounce-back loans and CBILS) is being launched, of which 80% will be underwritten by the Government for lenders). We will be looking closely at who can apply, how the rates will work and what the lending criteria will be. So far we know that the loans range from £25,000 up to £10m and firms have until the end of the year to apply.
4) Super deduction tax break
A new super deduction tax break has been launched for firms that will reduce their tax bill by 130% of what they spend on investment. It’s a significant change to current capital allowances legislation. We will be checking this area very carefully.
5) Last orders…
Want to buy your local pub? A new £150m Community Ownership Fund will give you the chance to buy into endangered pubs, sports clubs, theatres, music venues and even post office buildings. Under the fund, which will open in the summer, community groups will be able to bid for up to £250,000 matched-funding to buy local assets to run as community-owned businesses. Bids are to open later in the year. Cheers!
