Below are the key points for the UK Budget announced on 3 March 2021, that may affect your accounts.

VAT cut for hospitality and tourism sector

The temporary reduction in VAT rate for the hospitality and tourism sector from 20% to 5% has been extended until the end of September 2021. Then an interim rate of 12.5% will be introduced for a further 6 months. The standard rate will then return to 20% in April 2022.

Self-employed Income Support Scheme (SEISS)

The Self-Employed Income Support Scheme (SEISS) has been extended until September 2021.

• A fourth grant will cover the period February to April, and a fifth and final grant to cover the period from May onwards.
• The fourth grant will cover three months of support at 80% of average trading profits, up to a total of £7,500, with claims open from April 2021.
• For the fifth grant, people whose turnover has fallen by 30% or more, will receive the full 80% grant. People whose turnover has fallen by less than 30%, will receive a 30% grant.
• The scheme has been extended. Now self-employed people who couldn’t evidence 2018/19 tax returns, but who filed their 2019/20 tax return by midnight last night, can now also access the scheme (fourth and fifth grant).

New: £5bn restart scheme of grants for Covid impacted businesses

Consisting of the following:

• £6,000 for non-essential retail businesses, as these will be the first to reopen.
• Up to £18,000 in grants for hospitality and leisure businesses.

New: Recovery loan scheme to replace Bounce Back and CBILS loans

• Any business can apply for loans from £25k to £10m through to the end of 2021.
• The Government will provide a guarantee to lenders of up to 80%.

Corporation tax rise in 2023 from 19% to 25%:

Corporation tax will rise from 19% up to a maximum of 25% from April 2023 for companies with profits of more than £50k. There will be a taper above £50k, so only businesses with profits of £250k or greater will be taxed at the full 25% rate.

Furlough/Job Retention Scheme (JRS) extension

The Job Retention Scheme has been extended until September, with no changes in terms of employees, who will continue to receive the same financial support. For employers, from July they will have to pay 10% of the cost, with 20% in August and September.

Business rates relief

Extended 100% business rates holiday to eligible businesses in the retail, hospitality and leisure businesses for the first three months of the year (ie to the end of June). For the remaining 9 months of the year, rates will be discounted by two thirds. A cut worth £6bn.

To find out more details, please visit GOV.UK >