Budget 2021 Summary

With the UK having been adversely affected by the coronavirus (COVID-19) pandemic, Chancellor Rishi Sunak presented the 2021 Budget against a backdrop of ongoing economic hardship.

See our short video summary for some of the key business and tax measures presented by Director of Tax, Debbie Franklin, click here.

Key measures at a glance:

  • Furlough extended until the end of September, no change of terms for employees. From July employers to contribute 10% and then 20% in August and September.
  • The Self-Employment Income Support Scheme has been extended. The 4th grant will cover February to April, worth 80% of average trading profits up to £7,500. A 5th grant will be available from July. The 4th and 5th self-employment grant take into account 2019/20 tax returns.
  • £3,000 for each new apprentice hired between the 1 April to 30 September 2021.
  • Hospitality & retail
    • £6000 ‘restart’ grants for retail.
    • £18000 ‘restart’ grants for hospitality.
    • Eligible retail, hospitality and leisure businesses pay no business rates for 3 months, with up to 66% relief for the rest of the year.
    • 5% VAT rate extended to 30 September, 12.5% interim VAT rate from October.
  • Stamp duty cut until end of June with tapered extension until 30 September.
  • 95% mortgages to be government backed.
  • No rise to income tax, NI or VAT rates.
  • Personal tax thresholds frozen.
  • An increase in the Personal Allowance to £12,570 in April 2021.
  • Universal credit increase extended until September.
  • National Living Wage to increase to £8.91 from April 2021.
  • From April 2023 the rate of Corporation Tax paid on company profits will increase from 19% to 25%. Companies with profits under £50,000 will remain at 19%.
  • Through the 130% super-deduction, companies can cut their taxes by up to 25p for every pound they invest.
  • All alcohol duties and fuel duties frozen.

About author

author image
Debbie Franklin
Tax Accountant