In his opening statement to this year’s Budget, the Chancellor, Rishi Sunak has admitted that the pandemic has done permanent damage to our economy.  Support to millions was essential. As a result, however, the borrowing hiked up and it can be now comparable to the one in the two wars. “It’s going to take this country, and the whole world, a long time to recover from this extraordinary situation” 

The new budget reflects our economic state, is positive but at the same time realistic.  

Announced in the budget is  further support for the employers and the self-employed through:

  • The extension of the Coronavirus Job Retention Scheme  
  • Self Employment Income Support Scheme – future grants confirmed
  • VAT deferral

To end of June the UK government will continue to pay 80% of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month,  In July CJRS grants will  be reduced to 70% of employees’ usual wages (up to a cap of £2,187.50)  and  in August and September to 60% of employees’ usual wages (up to a cap of £1,875) .

In the period July – September Employers will need to fund by themselves the difference between the furloughed employees’ usual pay and the CJRS grants. The required is of employers to pay a minimum of 80% of the usual pay and they can go above it if they wish to do so.

Employers must also continue to pay the associated NI and pensions contributions on the subsidised furloughed pay.

For the claims for periods  from 1 May 2021:

Eligible for the CJRS scheme are all those who were on a Payroll on 2 March 2021.  This means employers must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 2 March 2021. 

 

In terms of the Self-Employment Income Support Scheme, the government has confirmed the future grants. The Self-Employment Income Support Scheme (SEISS) will continue until September with a fourth and fifth grant.

Those grants will take into account submitted 2019-20 tax returns. This means  that even  all who were not eligible for previous grants may be able to claim. 

The Fourth SEISS grant will be a taxable grant, based on 80% of three months’ average trading profits, paid out in a single payment and capped at £7,500 in total. 

The grant will be available to claim from late April.  Eligible for this grant will be only those  significantly  impacted by the coronavirus between February 2021 and April 2021 with trading profits of no more than £50,000 .

The UK government has also announced the fifth and  final SEISS grant covering May to September. Maximum amount of 80% of taxable profits over the relevant period will be capped at £7,500 (£50K profit). This is only only for  those whose turnover has been reduced by 30% or more.

You may not be eligible to claim the fifth grant if you:

  • Have not submitted a tax return for 2019-20
  • Are a company director who takes your income as dividends 
  •  Your earnings are over £50,000
  • Less than half of your income is from self-employment

Those who are not eligible for SEISS may be eligible to apply for 

  • Bounce Back Loans
  • Tax deferrals
  • Rental support
  • Increase levels of Universal Credit
  • Mortgage holidays
  • Other business support grants

Additional Universal Credit payments of £20 per week are extended to the end of September. 

All on working tax credit will receive a one off payment of £500. 

VAT clients with outstanding payments due between 20‌‌ ‌March and 30 June 2020  will still have to settle them by 31‌‌ ‌March if possible.

If they cannot afford to pay by 31‌‌ ‌March this year, they can now join the online VAT deferral new payment scheme.  This will help spread the payment to:

  • 11 instalments if they join by 19‌‌ ‌March
  • 10 instalments if they join by 21‌‌ ‌April
  • 9 instalments if they join by 19‌‌ ‌May
  • 8 instalments if they join by 21‌‌ ‌June..

The online service will close on 21‌‌ ‌June 2021 –and all those who wish to  join the scheme online must do so before this date.

The income tax Personal Allowance will rise as planned to £12,570 from April 2021 and will remain at this level until April 2026 – UK wide.

The income tax HRT will rise as planned to $50,270from April 2021and will remain at this level until April 2026 (apples to taxpayers in England, Wales,  and Northern Ireland)

The main rate of corporation tax wil increase from April 2023 to 25% for businesses with profits of over £250,000.

Your Tax Assistant – Budget for the pandemic 

Source – HMRC, BBC website, various 

 

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Budget for the pandemic