Key Points at a Glance
Coronavirus Job Retention Scheme (CJRS)
- The Budget confirms the continuation of the CJRS in its current form until the end of June 2021.
- From 1 July the terms change and employers will need to contribute as set out below:
- As the economy reopens and demand returns, the government will introduce employer contributions towards the cost of unworked hours until September 2021.
- From July, the employer contribution towards the cost of unworked hours will be 10% in July, 20% in August and 20% in September.
- The income tax Personal Allowance and higher rate threshold (HRT) will be updated in line with Consumer Price Inflation (CPI) as planned in April 2021, then maintained at that level until April 2026.
- Personal income tax allowance will be frozen at £12,570 from April 2022 to 2026.
- Higher rate income tax threshold to be frozen at £50,270 from 2022 to 2026.
National Insurance Contributions (NICs)
- As previously announced and legislated for in February 2021, in 2021-22 NICs thresholds will rise with CPI, bringing the NICs Primary Threshold/Lower Profits Limit to £9,568 and the Upper Earnings Limit (UEL)/Upper Profits Limit (UPL) to £50,270, in line with the income tax HRT.
- The UEL/UPL will then remain aligned with the HRT at £50,270 until April 2026. All other NICs thresholds will be considered and set at future fiscal events. NICs thresholds apply across the UK.
- A new 130% first-year capital allowance for qualifying plant and machinery assets; and a 50% first-year allowance for qualifying special rate assets.
- From 1 April 2021 until 31 March 2023, companies investing in qualifying new plant and machinery assets will be able to claim:
- a 130% super-deduction capital allowance on qualifying plant and machinery investments.
- a 50% first-year allowance for qualifying special rate assets.
This super-deduction will encourage firms to invest in productivity-enhancing plant and machinery assets that will help them grow, and to make those investments now.
- The measure sets the charge to Corporation Tax and sets the main rate at 19% for the Financial Year beginning 1 April 2022 and also sets the charge to CT for the Financial Year beginning 1 April 2023.
- This measure also announces that from 1 April 2023:
- the Corporation Tax main rate for non-ring fenced profits will be increased to 25% applying to profits over £250,000.
- A small profits rate (SPR) will also be introduced for companies with profits of £50,000 or less so that they will continue to pay Corporation Tax at 19%.
- Companies with profits between £50,000 and £250,000 will pay tax at the main rate reduced by a marginal relief providing a gradual increase in the effective Corporation Tax rate.
Self Employment Income Support
- An extension of the UK-wide Self Employment Income Support scheme to September 2021, with 600,000 more people who filed a tax return in 2019-20 now able to claim for the first time.
- The self-employment income support scheme has been extended. The fourth grant will cover February to April, worth 80% of average trading profits up to £7,500.
- As the government-backed bounce back loan (BBL) and coronavirus business interruption loan scheme (CBILS) come to an end, the Treasury is launching a new loan scheme to run until the end of the year. Loans can be between £25,000 and £10m.
- £5 billion for new Restart Grants – a one off cash grant of between £6,000 and £18,000 for hospitality, accommodation, leisure, personal care and gym businesses in England.
- Extension of the apprenticeship hiring incentive in England to September 2021 and an increase of payment to £3,000.
- £7 million for a new “flexi-job” apprenticeship programme in England, that will enable apprentices to work with a number of employers in one sector.
- Additional £126 million for 40,000 more traineeships in England, funding high quality work placements and training for 16-24 year olds in 2021/22 academic year.