Please circulate this update to all relevant staff within your business.
Budget 2021 sets path for recovery Click Here
Chancellor’s three-point plan to protect jobs and strengthen public finances
1. Billions to support businesses and families through the pandemic
2. Investment-led recovery as UK emerges from lockdown
3. Future changes to strengthen public finances
Key points we took from the budget include:
To protect the livelihoods of those hardest hit, the Coronavirus Job Retention Scheme will be extended to September
Self-Employment Income Support Scheme (SEISS) will continue with a fourth and a fifth grant.
The business rates holiday in England has been extended by an additional three months. That means 750,000 retail, hospitality and leisure properties in England will pay no business rates for three months from 1 April when combined with Small Business Rates Relief, with further relief available for the rest of the year.
To continue supporting the 150,000 businesses in the tourism and hospitality sectors and to protect 2.4 million jobs, the government has extended the temporary 5% reduced rate of VAT until 30 September 2021. To help businesses manage the transition back to the standard rate, a 12.5% rate will then apply for a further six months, until 31 March 2022. Click Here for further details.
Grant funding will be available to businesses in England through a new £5 billion Restart Grant scheme to help the high street. Non-essential retail businesses will open first, so they’ll receive grants of up to £6,000 per premises. Hospitality and leisure businesses, including personal care and gyms, will open later, or be more impacted by restrictions when they do, so we’ll give them grants of up to £18,000.
A new Recovery Loan Scheme will also be launched to replace the existing government guaranteed schemes
As part of the UK Government’s Plan for Jobs to support, protect and create jobs, the Chancellor is increasing support with £126 million of new money to enable 40,000 more traineeships, and doubling the cash incentive to firms who take on an apprentice to a £3,000 payment per hire
The National Living Wage will be increased to £8.91 from April and there will also be a six-month extension of the £20 per week Universal Credit uplift, with eligible Working Tax Credit claimants receiving a one-off payment of £500.
To balance the need to raise revenue with the objective of having an internationally competitive tax system, the rate of Corporation Tax will increase to 25%
Capital Investment: Beginning April 2021, a new super-deduction will cut companies’ tax bill by 25p for every pound they invest in new equipment meaning they can reduce their taxable profits by 130% of the cost.
“For the next two years, when companies invest, they can reduce their taxable profits not just by a proportion of the cost of that investment, as they do now or even by 100% of their cost, the so-called full expensing some have called for, with the Super Deduction they can now reduce their taxable profits by 130% of the cost.
Let me give the House an example.
Under the existing rules, a construction firm buying £10 million of new equipment could reduce their taxable income, in the year they invest, by just £2.6 million.
With the Super Deduction, they can now reduce it by £13 million.”
There will be a number of exclusions including contracts entered into before 3 March 2021 even if expenditure is incurred after 1 April 2021.
It is interesting to note that the new super-deduction is only available to companies within the charge to corporation tax.
Unincorporated businesses cannot benefit under this new rule and will continue to be able to claim the capital allowances at 100% of up to £1m under the annual investment allowance.
Help to Grow:
“Too often smaller firms don’t have the time or resources to acquire the extra skills and training they need to be more efficient, more digital, and more productive.
Thanks to Be the Business, we have made a good start at supporting these firms.
Today, the Business Secretary and I are going further with a new set of UK-wide schemes: Help to Grow.
First, Help to Grow: Management will help tens of thousands of small and medium sized businesses get world-class management training.
Dozens of business schools across the United Kingdom will offer a new executive development programme with mentoring and peer learning, and government will contribute 90% of the cost.
A real commitment to learn more, make more and earn more.
Second, Help to Grow: Digital.
With the pandemic, many businesses have moved online. This has been a challenge. But we want to turn it into an opportunity.
We’re going to help small businesses develop digital skills by giving them free expert training and a 50% discount on new productivity-enhancing software, worth up to £5,000 each.
Both programmes will commence by the autumn; and I’d urge interested businesses to register today on www.gov.uk/helptogrow
To read the Chancellor’s Budget Speech in full: Click Here
You can continue to choose to top up your employees’ wages above the 80% total and £2,500 cap for the hours not worked at your own expense.
Coronavirus Job Retention Scheme (CJRS) – Furlough
To support businesses and employees across the UK through the next stage of the pandemic, the government is extending the CJRS for a further five months from May until the end of September 2021.
Employees will continue to receive 80% of their current salary for hours not worked.
There will be no employer contributions beyond National Insurance contributions (NICs) and pensions required in April, May and June.
From July, the government will introduce an employer contribution towards the cost of unworked hours of 10% in July,
20% in August and
20% in September, as the economy reopens.
The following guidance pages have all been updated, please disregard previous versions:
Steps to take before calculating your claim using the Coronavirus Job Retention Scheme Click Here
Check which employees you can put on furlough to use the Coronavirus Job Retention Scheme Click Here
Check if you can claim for your employees' wages through the Coronavirus Job Retention Scheme Click Here
Check if your employer can use the Coronavirus Job Retention Scheme Click Here
Calculate how much you can claim using the Coronavirus Job Retention Scheme Click Here
Pay Coronavirus Job Retention Scheme grants back Click Here
Claim for wages through the Coronavirus Job Retention Scheme Click Here
The new information is as follows:
The scheme has been extended until Thursday 30th September 2021. From Thursday 1st July 2021, the level of grant will be reduced each month and employers will be asked to contribute towards the cost of furloughed employees’ wages.
New information on claim periods from May 2021 added.
For periods starting on or after Saturday 1st May 2021, you can claim for employees who were employed on Tuesday 2ndMarch 2021, as long as you have made a PAYE Real Time Information (RTI) submission to HMRC between Friday 20th March 2020 and Tuesday 2 March 2021, notifying a payment of earnings for that employee.
Details of how you should calculate your claims for periods starting on or after Saturday 1st May 2021 will be provided in updated guidance in due course. We will carry this information on a future AIMS Update
Recovery Loan Scheme Click Here
The scheme will launch on Tuesday 6th April 2021 once the 3 existing loan schemes, close and run to 31st December 2021.
Once received, the finance can be used for any legitimate business purpose, including growth and investment.
The government guarantees 80% of the finance to the lender to ensure they continue to have the confidence to lend to businesses
Term loans and overdrafts will be available between £25,001 and £10 million per business.
Invoice finance and asset finance will be available between £1,000 and £10 million per business.
Finance terms are up to six years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years.
No personal guarantees will be taken on facilities up to £250,000, and a borrower’s principal private residence cannot be taken as security.
You will be able to apply for a loan if your business:
Is trading in the UK
You will need to show that your business:
Is viable or would be viable were it not for the pandemic
Has been impacted by the coronavirus pandemic
Is not in collective insolvency proceedings - further details will be provided in due course
Business that have received support under the existing COVID-19 guaranteed loan schemes will still be eligible to access finance under this scheme, if they meet all other eligibility criteria.
Further details on how to apply and details of accredited lenders will be released by HM Treasury in due course. We will carry this information on a future AIMS Update
Information about the fourth and fifth grant grants have been published: Click Here
Fourth Grant Click Here
To allow us to process recently submitted 2019 to 2020 Self-Assessment tax returns, the online claims service for the fourth grant will be available from late April 2021 until 31st May 2021.
If you are eligible, HMRC will contact you in mid-April to give you your personal claim date. This will be the date that you can make your claim from.
There will be more guidance about the fourth grant will be published by HMRC in due course. We will carry this information on a future AIMS Update
Fifth Grant Click Here
The UK government has also announced that there will be a fifth and final grant covering May to September.
You will be able to claim from late July if you are eligible for the fifth grant.
The amount of the fifth grant will be determined by how much your turnover has been reduced in the year April 2020 to April 2021.
The fifth grant will be worth:
80% of 3 months’ average trading profits, capped at £7,500, for those with a turnover reduction of 30% or more
30% of 3 months’ average trading profits, capped at £2,850, for those with a turnover reduction of less than 30%
Further details will be provided on the fifth grant in due course. We will carry this information on a future AIMS Update
Updates to tax charges when a person is no longer eligible to Self-Employment Income Support Scheme payments Click Here
Under current legislation a payment can be recovered by a tax charge if an individual claims a Self-Employment Income Support grant to which they are not entitled.
This measure allows HMRC to recover grants where an individual is no longer eligible for the grant following a change in circumstances and aligns Self-Employment Income Support and the Coronavirus Job Retention Scheme.
To check the full details: Click Here
Income Tax and coronavirus (COVID-19) support scheme: working households receiving tax credits Click Here
Under a one-off payment - Covid-19 support scheme: Click Here working households receiving tax credits of £500 is being made to Tax Credits recipients to cover a six-month period from April to September 2021 to continue this government support.
The measure will have effect from Tuesday 6th April 2021.
If you are eligible, you should receive your payment by Friday 23rd April 2021.
Everyone at AIMS is here to support any members, please email if you have any questions.
MORE THAN EVER PLEASE STAY SAFE – STAY WELL