The Self-Employed Income Support Scheme (SEISS) has been extended
The fourth grant will be available from April
The Chancellor confirmed that the fourth SEISS grant will be worth 80% of three months’ average trading profits, capped at £7,500 in total. The grant will cover the period of February to April.
Applications for the grant will open at some point in April, but’s not clear yet exactly when you’ll be able to apply.
The grant has been extended to ~600,000 people who were previously excluded
There has been one significant change, for the better, as the grant has been extended to some 600,000 people who were previously excluded by including those who filed a 2019/20 Self-Assessment tax return by midnight 2nd March.
A fifth and final grant will cover the period from May to September
The value of the fifth grant will be determined by a turnover test, to ensure that support is targeted at those who need it the most:
- If your turnover has fallen by 30% or more, you’ll continue to receive the full grant worth 80% of three months’ average trading profits, capped at £7,500
- If your turnover has fallen by less than 30%, you’ll receive a 30% grant, capped at £2,850
As more information is released we’ll update it here.
The furlough scheme has been extended
The furlough scheme will now run until the end of September, covering 80% of the employees salary for hours not worked, up to £2,500 per month.
From July, there will be an employer contribution required to cover some of the cost of unworked hours:
- 10% in July
- 20% in August
- 20% in September
You can see this handy breakdown on gov.uk here.
Universal credit uplift has been extended
Universal Credit uplift of £20 per week for the standard allowance has been extended for a further six months.
New: Recovery loan scheme
From 6 April 2021, which marks the end of Bounce Back & CBIL loans, the Recovery Loan Scheme will be introduced.
The Government will provide lenders with a guarantee of 80% on eligible loans between £25,000 and £10 million. This will be available until the 31st of December 2021.
The scheme will be open to all businesses, including those who have already received support under the existing Covid-19 guaranteed loan schemes.
New: Restart grants
A new ‘restart grant’ will start in April to help businesses in England, and will be up to £6,000 per premises for non-essential retail businesses and up to £18,000 per premises for hospitality, accommodation, leisure, personal care and gym businesses. They’re designed to give businesses the cash certainty they need to plan ahead and safely relaunch over the coming months.
No change in income tax or national insurance for 2020/21
There are no increases to Income tax, National insurance contributions or VAT planned, but thresholds will be frozen from 2022 onwards.
The Government will deliver on its promise to increase the personal allowance, this will increase to £12,570 next year. The rate will then remain the same until April 2026. The higher rate income tax threshold will similarly be increased next year, to £50,270, but will then also be frozen until April 2026.
VAT will slowly return to 20%
The VAT registration and deregistration thresholds will not change for a further period of two years.
The 5% reduced rate of VAT for the Tourism and Hospitality sectors will be extended for six months. It will now last until the end of September, with an interim rate of 12.5% for another six months after that. Returning to 20% in April next year.
Any business that took advantage of the original 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 2021.
Corporation tax will rise from 2023, for profits over £50,000 per year
The rate of corporation tax will increase from April 2023 to 25% on profits of over £250,000. The rate for 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.
New: Mortgage guarantee Scheme (and an extension to stamp duty nil rate band)
Mortgage Guarantee scheme
There will be a new mortgage guarantee scheme available from April 2021. This scheme 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. Under the scheme, all buyers will have the opportunity to fix their initial mortgage rate for at least five years if they wish.
The government will extend the temporary increase in the residential SDLT Nil Rate Band to £500,000 until 30 June 2021. Meaning if you will pay no stamp duty on a property purchase until 30th June 2021. Thereafter From 1 July 2021, the Nil Rate Band will reduce to £250,000 until 30 September 2021 before returning to £125,000 on 1 October 2021.
Looking for more info?
Much of the nitty gritty information is still yet to be shared! We'll be keeping an eye out for it and updating this article. But if you do have any questions or concerns feel free to get in touch with us on Coconut Bite, message us in the in-app chat, or drop us an email at email@example.com.