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.
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.
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.
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.