Please find below a summary of yesterday’s Budget announcements, including measures in the Treasury Budget book not announced by the Chancellor, which may be helpful for you:
- OBR now forecasting a swifter and more sustained recovery than expected in Nov last year – expect to return to pre-Covid level by middle of next year, 6 months earlier than previously thought
- Repairing the long term damage will take time, OBR still expect in five years’ time, our economy will be 3% smaller than it would have been
- Will grow this year by 4%, 7.3% in 2022 then 1.7% 1.6% and 1.7% in last three years of the forecast
- Interventions have supported jobs – forecast a lower peak of 6.5% in unemployed, 1.8m fewer people expected to be out of work than previously thought
Tax, VAT, rates etc
- Any business that took advantage of the original VAT deferral on VAT returns from 20 March through to the end of June 2020 can now opt to use the VAT Deferral New Payment Scheme to pay that deferred VAT in up to eleven equal payments from March 2021, rather than one larger payment due by 31 March 202
- A new super-deduction allowing companies to cut their tax bill by up to 25p for every £1 they invest in qualifying new plant and machinery assets.
- The rate of corporation tax will increase from April 2023 to 25% on profits over £250,000. The rate for small profits under £50,000 will remain at 19% and there will be relief for businesses with profits under £250,000 so that they pay less than the main rate.
- The Government confirms that the fourth Self-Employment Income Support Scheme grant will be worth 80% of three months’ average trading profits, paid out in a single instalment and capped at £7,500 in total. The grant will cover the period February to April, and can be claimed from late April. Self-employed individuals must have filed a 2019- 20 Self Assessment tax return to be eligible for the fourth grant.
- SMEs across the UK will continue to be able to reclaim up to two weeks of eligible Statutory Sick Pay costs per employee. This scheme is a temporary COVID-19 measure intended to support employers while levels of sickness absence are high
- The Government will legislate to ensure that the business rates relief repayments that have been made by certain businesses are deductible for corporation tax and income tax purposes.
- To help otherwise-viable UK businesses which have been pushed into a loss-making position, the trading loss carry-back rule will be temporarily extended from the existing one year to three years. This will be available for both incorporated and unincorporated businesses.
Construction / Housing
- A new mortgage guarantee scheme in April 2021 will provide a guarantee to lenders across the UK who offer mortgages to people with a deposit of just 5% on homes with a value of up to £600,000. This will be available for new mortgages up to 31 December 2022.
- The £500,000 zero rate band will be extended by 3 months to the end of June. Then from June to the end of September, the rate will be tapered to £250,000 before returning to normal in October.
- The MHCLG will establish a Modern Methods of Construction Taskforce, backed by £10 million, to accelerate the delivery of MMC homes in the UK.
- An enhanced 10% rate of Structures and Buildings Allowance for constructing or renovating non-residential structures and buildings within Freeport sites in Great Britain, once designated. This means firms’ investments will be fully relieved after 10 years. To qualify, the structure or building must be brought into use on or before 30 September 2026.
Apprenticeships and business growth support
- An additional £126 million in England for high quality work placements and training for 16-24 year olds in the 2021/22 academic year. Employers who provide trainees with work experience will continue to be funded at a rate of £1,000 per trainee.
- The Government will extend and increase the payments made to employers in England who hire new apprentices. Employers who hire a new apprentice between 1 April 2021 and 30 September 2021 will receive £3,000 per new hire, compared with £1,500 per new apprentice hire (or £2,000 for those aged 24 and under) under the previous scheme.
- The Government will offer a new UK-wide management programme to upskill 30,000 SMEs in the UK over three years. The programme will combine a national curriculum delivered through business schools with practical case studies and mentoring. Over 12 weeks, and 90% subsidised by Government.
- The Government will launch a new UK-wide scheme in the autumn to help 100,000 SMEs save time and money by adopting productivity-enhancing software. This will include a voucher covering up to half of the costs of approved software up to a maximum of £5,000.
A new UK Infrastructure Bank will be headquartered in Leeds. The Bank will “partner with the private sector and local government to increase infrastructure investment to help tackle climate change and promote economic growth across the country”. It will have £12 billion of equity and debt capital and will be able to issue up to £10 billion of guarantees. It will begin operating in an interim form later in spring 2021.
The Government is launching the prospectus for the £4.8 billion Levelling Up Fund alongside Budget. This will invest in infrastructure including town centre and high street regeneration, local transport projects, and cultural and heritage assets. The prospectus will provide guidance to local areas on the process for submitting bids, the types of projects eligible for funding, and how bids will be assessed.
The Government will invest £18.8 million in local cultural infrastructure projects in Carlisle, Hartlepool, Wakefield and Yeovil.
On Birmingham Interchange Station, £50 million is made available to develop proposals for transport improvements around the High Speed 2 Birmingham Interchange Station.
£59 million towards the construction of five new stations in the West Midlands, plus more than £40 million of funding to reinstate passenger services on the Okehampton Exeter line.
- Fuel Duty continues to be frozen.
- End of the Red Diesel rebate from April 2022 for large parts of the economy.
- £1 billion for the Net Zero Innovation Portfolio to support the development of new solutions to cut carbon emissions and accelerate near-to-market low-carbon energy innovation.