15 Mar 2021
The Chancellor’s 2021 Budget focused on continued support as the UK moves towards what is hoped to be the end of the Covid pandemic this year. Homebuyers, businesses, employees and the self-employed are among those who should continue to benefit from these measures, though Sunak warned that businesses should prepare for a corporation tax rise – even if this won’t kick in until 2023. Here are the main measures in summary:
Furlough to be extended: The Coronavirus Job Retention Scheme, known as furlough, will continue to be in place until the end of September.
Self-employed furlough (SEISS) also extended: The self-employed equivalent of the furlough scheme is the Self-employed Income Support Scheme (SEISS). The Chancellor has extended this scheme to those newly self-employed, meaning that over 600,000 people can now claim a SEISS grant. The scheme is now open to those who filed their first self-employed tax return in 2019/20 or before.
95% mortgages return: First-time buyers and existing buyers alike will find more 95% mortgages available, thanks to government guarantees to lenders.
Stamp duty holiday extended again: Another extension has been added to the stamp duty land tax holiday, which will now finish at the end of June. After this, there will be a further stamp duty holiday on homes worth £250,000 or less, for another three months. After this, the system will return to normal, with stamp duty starting at £300,001 for first-time buyers and £125,000 for everyone else.
New grant scheme for businesses as they reopen: There is a new £5 billion grant scheme for businesses, called ‘restart grants’, worth up to £18,000 per firm (but just £6,000 for most non-essential businesses). These will be available from April via local authorities.
Business rates holiday extended: The retail, hospitality and leisure sectors will continue to be exempt from business rates until the end of June, with a further two-thirds discount applying for the remaining nine months of the 2021/22 tax year.
Warning of corporation tax rise to come: The 2021 Budget wasn’t all generosity. Recognising that the huge levels of state support would need to be paid for eventually, Rishi Sunak announced that corporation tax would rise from 19% to 25% in April 2023. However, the smallest 1.5 million companies will continue to pay it at 19%.