News

The latest news and advice from Cheadle Accountants.

Get In Touch

Archive for the ‘Budget’ Category

Budget 2021

Friday, March 19th, 2021

 

On 3rd March 2021 Chancellor Rishi Sunak delivered the Spring 2021 budget. There were significant changes announced in a bid to guide the UK on its road to recovery in the coming months and years.

 

Corporation Tax

 

From 1st April 2023 corporation tax rates are changing! The current rate of corporation tax is 19% and will be changing as follows:

 

Trading Losses

 

Currently, trading losses can be allocated against profits of the current year, carried back and offset against profits in the previous year or carried forward against future profits. However, for 2020/21 and 2021/22 only , up to £2 million of tax losses will be able to be carried back and offset against profits for the previous 3 years. This applies to both Companies and Unincorporated businesses

 

Super Deduction Capital Allowances

 

From 1 April 2021 until 31st March 2023, Incorporated companies only , investing in new Plant and Machinery will be entitled to claim a ‘super deduction’ of 130% first year capital allowances against profits. Cars, second hand plant and machinery and leased assets are all excluded. Unincorporated businesses are also excluded .

Personal Tax

 

Personal allowance will increase from the current £12,500 to £12,570 from April 2021. The basic rate threshold will also increase from £37,000 to £37,700 making the new higher rate threshold £50,270 from April 2021. The new rates will then be frozen until March 2026.

 

VAT

 

The current VAT registration threshold of £85,000 and the deregistration threshold of £83,000 is to remain in place until 31st March 2024.

 

All VAT registered businesses will need to be reporting via Making Tax Digital from 1st April 2022. This now includes businesses that are VAT registered but whose revenue has been under the VAT threshold.

 

If you have any questions, please contact either your client manager or partner by email or by phone.

Budget 2021 Covid Support

Friday, March 19th, 2021

 

On 3rd March 2021 Chancellor Rishi Sunak delivered the Spring 2021 budget. There were significant changes announced in a bid to guide the UK on its road to recovery in the coming months and years.

 

Coronavirus Job Retention Scheme

 

The Coronavirus Job Retention Scheme has been extended until September 2021. From July 2021, the government contribution will reduce from 80% to 70% and for both August and September this will then further reduce to a 60% government contribution. Employees will still need to receive 80% of pay for the hours not worked. Consequently employers will have to fund the remaining 10% and 20% of pay respectively.

 

Business Rates

 

During the 2021 spring budget, it was announced that the business rates holiday for certain business sectors, will be extended until the end of June 2021. Following this, the rates will then be discounted until March 2022.

 

Self-Employment Grants

 

There were two further self-employment grants announced in the budget. The first can be applied for in April 2021 and will cover 80% of average monthly trading profits up to £7,500. The second grant covering May – July 2021 will be available to those who have suffered a decline in turnover of more than 30%. This will also cover 80% of average monthly trading profits up to £7,500.

 

VAT

 

Last year, due to the difficulties caused by Covid-19 , the VAT rate for the hospitality, leisure and entertainment sector was reduced to 5%. This is to remain in place until 30th September 2021. Between 1st October 2021 and 31st March 2022 this rate will increase to 12.5% before reverting back to 20% from 1st April 2022.

 

VAT payments that were deferred between March 2020 and June 2020 to 31st March 2021 can now be paid in interest free instalments up to 31st March 2022. Applications to do this can be made online and must be completed by 21st June 2021.

If you have any questions, please contact either your client manager or partner by email or by phone on 01785 254550.