Coronavirus Support

The furlough and self-employment income support schemes (SEISS) have been extended until the end of September.

Furlough 

• Employees will continue to receive 80% of the normal pay
• From July 2021, employers will be expected to contribute 10%
• From August the employers contribution will increase to 20%
• The scheme will end in September

 SEISS grants 4 and 5

• The newly self-employed will now be eligible for the SEISS 4th and 5th grants, as long as their 2020 tax return was filed by midnight 2 March 2021
• The 4th grant covers the period February to April 2021.  It will be paid out at a rate of 80% of average trading profits, capped at £7,500, and can be claimed from late April.
• The 5th grant covers the period from May to September 2021.  It will be  based on 3 months average profits, but will only be paid at a rate of 80% if your turnover has fallen by more than 30%, capped at £7,500, if you turnover has fallen by less than 30%, you’ll only get 30% of the grant, capped at £2,850
• It is expected the final grant can be claimed from late July 2021.

 Business Restart Grants

• Hospitality, personal care and gyms will receive up to £18,000 to support their re-opening
• Non-essential retail will receive up to £6,000

 Business Rates Holiday

• The current rates holiday will be extended to 30 June 2021
• If you were forced to close on 5th January as part of the national lockdown, a further ⅔ reduction will be given from July 2021 until March 2022

 Vat Rate changes for the hospitality and tourism industries

• The 5% reduced rate of VAT will continue until 30 September 2021
• This will be increased to 12.5% from October 2021 until March 2022
• This will then revert to 20% from April 2022

 New Recovery Loan Scheme (to replace CBIL’S and BBL’s)

• Businesses of any size can apply for new loans from £25k to £10m
• Application will remain open until 31 December 2021
• The Government will guarantee 80% of the loan advanced

Taxes

 Corporation Tax

• Corporation tax will rise from 19% to 25% in April 2023 for companies making a profit in excess of £250,000.
• Small firms with profits under £50,000 will still pay the current 19% rate.
• A marginal tax rate will be used (between 19% and 25%) for profits between £50,000 and £250,000

 Capital Allowances

• A new “super deduction” of 130% tax relief on business investment will be introduced for a period of 2 years.
• You will be able to claim a deduction against profits of 130% of the net asset cost.

 Personal Tax

• The basic rate tax band increases from £12,500 to £12,570 from April 2021 and will remain at this level for 4 years.
• The higher rate band increases from £50,000 to £50,270 for the same period
• The CGT annual exemption is frozen at £12,300 until the tax year ending 5 April 2026.
• Inheritance tax  and pension lifetime allowance also remain frozen the same until the tax year ending 5 April 2026.

Vat

The registration threshold of £85,000 is frozen until at least 2024

 Property Tax

• Stamp duty land tax  threshold of £500k will continue until the end of June 2021

• This will reduce to £250k from July 2021 until September 2021
• And then reduce further to £125k from 1 October 2021

 Losses and Loans

• Businesses that made losses in 2020/2021 or 2021/2022, of up to £2 million can carry back losses for 3 years, instead of one

 Apprenticeship Bonus

• This has been increased to £3,000 for any age apprentice
• Extended to 30 September 2021

 Business Growth

Two new Government supported schemes for businesses with between 5 and 249 employees

• Help to Grow Management:
• 12 week management training with key modules covering financial management, innovation and digital adoption.
• Government will pay 90%
• You will be charged £750
• Help to Grow Digital:
• Help for small businesses to develop digital skills, with 50% discounts on hardware and software, up to £5,000 each 
• Register your interest here for both schemes

For a full breakdown of the announcement, please click here

Email us at info@figurefairy.com or call 01208 369972. You can find all of our contact details on our Contact Page.

Welcome to Figure Fairy  Ltd - Chartered Accountants Bodmin, Cornwall. We provide accountancy and bookkeeping services to businesses in Cornwall and beyond, including Bodmin, Camelford, Callington, Launceston, Liskeard, Looe, Lostwithiel, Newquay, Saltash, St Austell, St Blazey, Torpoint, Truro, Wadebridge and Slough.

We are Xero specialists, but are happy to work with other accounting packages, such as  Quickbooks & FreeAgent.