Budget 2021: At a glance

The Budget 2021: at a glance. A summary key budget announcements together with items published without announcement.

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Coronavirus support

• Coronavirus Job Retention Scheme (CJRS) is extended to September 2021.
• Self-employment income support scheme (SEISS): two further grants.
• SEISS: newly self-employed may now qualify for these later grants.
• Changes to the taxation of SEISS grants.
• New Restart Grants and Additional Restrictions Grants.

See Budget 2021: COVID-19 measures

Income Tax, NICs, claims and reliefs

• Freeze on the personal allowance and higher rate threshold at 2021-22 levels up to and including 2025-2026
• NICs limits aligned
• Trading loss carryback: a new three year carry back for continuing business with £2,000,000 cap.
• Exemption from Income Tax for financial support payments to potential victims of modern slavery and human trafficking 
• Pensions Lifetime Allowance: this is maintainws at £1,073,100 up to and including 2025-26
• Venture Capital Schemes: Extension of the Social Investment Tax Relief (SITR) to April 2023

See Budget 2021: Income Tax, NICs, claims & reliefs

Corporation Tax

• Corporation Tax: from April 2023 the main rate will be 25%. The 19% rate continues for profits up to £50,000, tapering to the main rate of 25% for profits over £250,000.
• Loss carryback: extended to three years for continuing business with £2,000,000 cap.
• Enterprise Management Incentives scheme: call for evidence.
• R&D Relief: review & new condoc.
• Corporation Tax: exemption for the Northern Ireland Housing Executive.
• EU Interest and Royalties Directive: repeal.
• Research and Development PAYE Cap: updated design.
• Hybrid and other mismatches.
• Review of banking surcharge.

See Budget 2021: Corporation Tax

Employers

• Off-Payroll Working: Technical changes to the Off-Payroll Working rules legislation, including a new Targeted Anti Avoidance Rule (TAAR).
• Traineeships: extension for 16-24-year-olds in England.
• Statutory Sick Pay Rebate Scheme: extension 17 COVID-19: HMRC exemptions investment-led recovery.
• COVID-19: easement for employer-provided cycles exemption.
• Enterprise Management Incentives (EMI): Extension of time-limited exception to working time requirements.
• Optional Remuneration Arrangements: disregard for statutory parental bereavement payments.
• Income tax exemption for employer-reimbursed COVID-19 tests for 2020-21.
• Easement for employer-provided cycles exemption.
• Changes to treatment of termination payments and post-employment notice pay..
• COVID-19 home working: extended exemption will have effect until 5 April 2022.
• Increase the van benefit charge and the car and van fuel benefit charges.

See Budget 2021: Employers

Capital Allowances

• 130% Super Deduction for main rate assets.
• 50% First Year Allowance (FYA) for special rate assets for two years.
• Annual Investment Allowance (AIA) extension.
• Restoring plant and machinery leases to pre-Covid-19 treatment.
• Qualifying decommissioning expenditure.
• Freeports: 100% FYAs and Enhanced Structures & Buildings Allowance.

See Budget 2021: Capital Allowances

Capital Gains Tax

• Maintain the Annual Exempt Amount at £12,300 up to and including 2025-26.
• Capital Gains Tax: Relief for gifts of business assets anti-avoidance for non-residents.

• Venture Capital Schemes: Extension of the Social Investment Tax Relief (SITR) to April 2023.

See Budget 2021: Capital Gains Tax

Inheritance Tax

• Maintain thresholds at 2020-21 levels up to and including 2025-26.

See Budget 2021: Inheritance Tax

Land & Property taxes

Stamp Duty Land Tax (SDLT)

• Maintain nil-rate band at £500k until 30 June 2021, £250k until 30 September 2021.
• Non-UK Resident SDLT Surcharge 2% from 1 April 2021.
• Relief for Freeports. 

Annual Tax on Enveloped Dwellings (ATED)

• Update to annual chargeable amounts for 2021/2022 chargeable period.
• Annual Tax on Enveloped Dwellings (ATED) and 15 per cent rate of Stamp Duty Land Tax (SDLT): Relief for Housing Co-Operatives.

Business Rates

• Three months 100% holiday, nine months 66% relief with cap.
• Changes to the tax-deductibility of business rate repayments.

See Budget 2021: Land & Property

VAT

• The registration threshold will be maintained at £85,000 up to and including 2023-24.
• The reduced rate for hospitality, accommodation and attractions will extend the 5% rate to 30 September 2021 then 12.5% to 31 March 2022.
• The window for starting deferred payments through the VAT New Payment Scheme is extended by up to three months.
• HMRC will have new powers to tackle Electronic Sales Suppression (ESS).
• Changes to the Tour Operators Margin Scheme.
• The reversal of the removal of NI Second Hand Margin Scheme for cars.
• A repeal the VAT Treatment of Transactions Order 1992.
• The extension of MTD for Value Added Tax to all VAT registered businesses from 1 April 2022.

See Budget 2021: VAT

Tax penalties, compliance & administration

• Tax Conditionality: Licensing in England and Wales.
• Self-assessment: penalty easement.
• Interest harmonisation and tax penalty reform.
• OECD Mandatory Disclosure Rules for Digital Platforms.
• HMRC: investment in compliance.
• HMRC: investment in digital infrastructure.
• HMRC: additional resource for debt pursuit, delayed from September 2020 to April 2021.
• Powers to amend interpretation and other provisions relating to banks.
• Amendments to HMRC Civil Information Powers.
• Amendment to Customs and Excise review and appeals legislation.
• A civil penalty for the unauthorised removal of goods that have been seized ‘in situ’.
• Tackling Promotors of Tax Avoidance: further measures.
• Follower Notices & Penalties: further measures.

Duties & levies

• Fuel Duty: one year freeze in 2021-22.
• Alcohol Duty: one year freeze in 2021-22.
• Tobacco Duty Rates: Consolidation of rates into Finance Bill 2021.
• Gaming Duty: rates set.
• Air Passenger Duty (APD) rates set for 2022 to 2023.
• Red Diesel: exemptions.
• Vehicle Excise Duty: freeze for HGVs in 2021-22.
• HGV Road User Levy: suspend for a further 12 months from August 2021 and freeze rates.
• Carbon Price Support (CPS) rate: maintain in 2022-23.
• Northern Ireland Steel Import Duty.
• Aggregates Levy: one year freeze in 2021-22.
• Landfill Tax: rates set for 2021 to 2022.
• Landfill Communities Fund-2021 to 2022.
• Plastic Packaging Tax.
• Repeal of Carbon Emissions Tax legislation.

Benefits

• Universal Credit: maintain £20 increase to the standard allowance for six months.
• £500 payment to eligible Working Tax Credit recipients.
• Universal Credit: three-month delay to Minimum Income Floor reintroduction.
• Universal Credit: maintain surplus earnings de minimis at £2,500 in 2021-22.
• Shared Accommodation Rate (SAR): accelerate introduction of exemptions.

Misc

• Help to Grow: management up to 90% grants.
• Help to Grow: digital strengthening the public finances.
• UK Emissions Trading Scheme.
• DWP: investment in compliance with Financial Transactions.
• Public sector net borrowing impact of changes to financial transactions and guarantees. Previously announced policy decisions Financial transactions.
• UK-EU Future Relationship Agreement on Social Security Coordination: benefit rules.
• Local government: exceptional financial support for Local Authorities through a capitalisation direction.
• Withdrawal of LIBOR.

Useful guides

Budget 2021: Subscriber guide
A detailed guide with links to more detail on all the key topics for SMEs and their owners.