Extending the Coronavirus Job Retention Scheme (CJRS) until the end of September 2021:
The UK government will continue to pay 80% of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month, up to the end of June 2021. For periods in July, CJRS grants will cover 70% of employees’ usual wages for the hours not worked, up to a cap of £2,187.50. In August and September, this will then reduce to 60% of employees’ usual wages up to a cap of £1,875. Employers will need to continue to pay their furloughed employees at least 80% of their usual wages for the hours they do not work during this time, up to a cap of £2,500 per month
The VAT deferral new payment scheme:
The new payment scheme helps businesses with deferred VAT to pay what they owe in smaller, monthly instalments from March, interest free. The scheme is now open, and you can choose to make 2-11 monthly payments, depending on when you join. The later you join the fewer instalments are available to you. You can join through a simple online service without needing to contact HMRC. You need to join the scheme before the end of June. More details are available from GOV.UK.
VAT reduction for the UK’s tourism and hospitality sector:
The government will extend the temporary reduced rate of 5% VAT for goods and services supplied by the tourism and hospitality sector until 30 September 2021. To help businesses manage the transition back to the standard 20% rate, a 12.5% rate will apply for the subsequent six months until 31 March 2022.
Continuation of the home office equipment expenses COVID-19 easement for the 2021-22 tax year:
An Income Tax exemption and corresponding NICs disregard were introduced for the 2020-21 tax year. This allowed employers to reimburse employees for the cost of home office equipment deemed necessary to work from home as a result of the COVID-19 outbreak free from Income Tax and Class 1 NICs. The exemption was due to end on 5 April 2021 but will now be extended to have effect until 5 April 2022.
Tax rate changes:
Personal Allowance and higher rate threshold (HRT):
The income tax Personal Allowance will rise with CPI as planned to £12,570 from April 2021 and will remain at this level until April 2026.
The income tax HRT will rise as planned to £50,270 from April 2021 and will remain at this level until April 2026.
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.
Pensions Lifetime Allowance:
The government will maintain the Lifetime Allowance at its current level of £1,073,100 until April 2026.