We waited worryingly for this budget, well I did after all the rumours and speculation e.g., taxing the reserves of limited companies which has not happened. And arguably Rishi Sunak’s second Coronavirus budget seems to mainly be supportive, at least for now.
Here is an overview of the main features from my point of view which I hope clearly highlights the concerns of most individuals and small businesses in the Chichester locality.
- Nobody can have failed to have noted the big headline that Corporation Tax will increase to 25% from 2023 i.e., two years time from this coming April. This will not affect companies with profits below £50,000 and from £50,001 upwards the Corporation Tax rate will gradually increase with the full 25% only being applied to companies with profits of over £250,000.
- For businesses that have incurred losses however, they will now be able to carry those losses back and offset them against the previous 3 year’s profits rather than just one year as in the current rules.
- To help and encourage businesses to invest in new equipment over the next two years, 25% tax relief is offered on those purchases even though small business profits are still being taxed at 19%. This is being called a ‘Super Deduction’.
- There is also extended help for businesses that took advantage of the Vat deferral scheme for their vat bills relating to vat quarters between 20th March and 30th June 2020. The options for those businesses now are to either …
- pay their vat bill by 31/3/2021
- Opt into the new vat deferral scheme once launched including setting up a direct debit and paying the first of 11 interest free installments. The deadline for admission to this scheme is 31/3/2021.
- Request further help from HMRC
- Tourist and hospitality industries will continue to benefit from the 5% rate of vat until 30/6/2021 and then from 1/7/2021 the rate will increase to 12.5% for those industries until 31/3/2022 when they will revert to the standard rate of vat unless otherwise advised.
- Ebay and Amazon traders should be aware that the government are focusing on them and are looking to implement rules that require the platform owners to disclose information about their income to HMRC. If you are one of those traders, it may be time to speak to an accountant!
- The government will continue to provide direct help for businesses and the chancellor announced in this budget that the furlough scheme will continue until September 2021 but will be gradually reduced from July as it was in 2020.
- Further grants will be provided in the form of re-start grants. Further grants will be available for the self-employed including those that filed a tax return before the budget announcement and there will be further loans.
- The Business Rates Holiday for relevant businesses continues until June then reduces to 66%.
- I just want to finish with the one bit of good news for non-business individuals especially the young as they will now be able to access 95% mortgages.
This is intended as an easy-to-read overview to raise awareness rather than a detailed ‘how to’ for each feature. Any more than one page of A4 and I am at risk of losing most people. If any area is of concern to you, there will be lots of help online now that you know what to Google and we are here to help at any time as always.