In line with yesterday’s budget there are a few things that everyone should be aware of. We’ve done our best to keep this as brief and easy to read as possible, there are ample guides elsewhere which can summarize the budget in more technical language. Most of the information thus far comes from the chancellors speech, but as with all political budgets the devil is often in the details so bear in mind that we won’t know for sure all of the changes until the professional bodies have had a chance to scrutinize the information in the budget more fully.
Self Employed Income Support Scheme
In addition to the already promised payment in late April, there will be at least one more payment later this year. This will also include profits for 2019-20 in the calculation. In order to qualify for the next two payments you must have submitted your return prior to 2/03/2021 and have seen a “significant” fall in profits and a 30% fall in turnover.
Recovery Loan Scheme
To replace the Bounceback and CBIL Loans which end on 31 March, the government will release a new scheme guaranteeing 80% on loans between £25,000 and £1 million. These may be offered under normal loan conditions from banks, no further information available yet. This will be available to businesses who have already taken out CBIL or BBLs.
Increase in Corporation Tax
From April 2023, Corporation tax will increase from 19% to 25%. The new rate only applies to profits greater than £50,000. At the £50,000 threshold this tax will start to apply with reliefs, you marginal tax will increase between £50,000 and £250,000 of profits with the new rate only fully applying to companies with net profits >£250,000.
Loss Carry Back Rules Extended
Businesses can now carry back losses for up to 3 years instead of the normal 1 in order to claim a refund of taxes paid in prior years.
“Super Deduction” on New Plant & Machinery
New purchases of plant and machinery will now entitled you to claim 130% of its value against your profits rather than the normal 100%. This only applies to plant and machinery acquired new, not second hand.
Extensions to existing schemes and holidays:
Job Retention Scheme
Extended to 30 September 2021 with employers expected to pay 10% and 20% of the furloughed wages in the two months leading up to September.
Holiday extended from March to June 2021
Hospitality 5% VAT Rate
Extended until 30 September 2021
Business Rates Holiday
Extended to June in England, no word from Stormont yet on whether they will follow this.