Budget 2021 – Covid

Coronavirus Job Retention Scheme (CJRS)

The CJRS has been extended to 30 September 2021.

It will operate in the same format until 30 June 2020.  

From July, employees will still be entitled to 80% of their salary, but the employer will have to contribute.  The employer contribution will be 10% in July and 20% in August and September.

Self Employed Income Support Scheme (SEISS)

The SEISS has also been extended to 30 September 2021.

There will be a fourth grant, on the same terms as the third grant, covering February to April and then a fifth, opening for applications in late July, covering May onwards.

For the fifth grant, those whose turnover has fallen by more than 30% will receive the full 80% grant.  Those whose turnover has fallen by less than 30% will only receive a 30% grant.

The newly self employed will be eligible to claim the fourth and fifth grants if they had filed their 2019-20 tax return by midnight last night (2 March 2021).

There was also a technical amendment to ensure that the grants are taxable in the tax year in which they are received (without the amendments, all grants would have been taxable in 2020-21 no matter when received).

Restart Grants

The Chancellor announced Restart Grants in England of up to £6,000 per premises for non-essential retail businesses and up to £18,000 per premises for hospitality and other sectors that are opening later, together with an additional £425 million of discretionary business grant funding for local authorities to distribute.

Business rates

The retail, hospitality and leisure rates holiday will continue until 30 June 2021.  For the remaining 9 months of the rates year, the bill will then be discounted by 66%.

VAT on the hospitality industry

The VAT rate for hospitality, hotel and holiday accommodation and admission to certain attractions was previously reduced to 5% up until 31 March 2021 due to Covid.

The government announced at Budget 2021 that the temporary reduced rate will be extended for a further six-month period at 5% until 30 September 2021.

A new reduced rate of 12.5% will then be introduced which will end on 31 March 2022.

VAT deferral

Businesses were permitted to defer payment of VAT payments that would have been due between 20 March 2020 and 30 June 2020.  This VAT was due for payment by 31 March 2021.

In September 2020, the Chancellor announced the the deferred VAT could be paid in up to 11 smaller interest free instalments.

Businesses can now opt in to the instalment scheme here.

NOTE: It was also announced in the Budget paperwork that there will be a penalty of 5% of the VAT outstanding if you have not paid in full, opted into the payment scheme or made an alternative arrangement to pay by 30 June 2021.

Recovery Loan Scheme

A new Recovery Loan Scheme will replace the Bounce Back Loan and CBIL schemes when they end on 31 March.

Businesses of any size will be able to apply for loans from £25,000 up to £10 million, and the government will provide a guarantee to lenders of 80%.  The scheme will be open from 6 April 2021 until 31 December 2021.

Those who have had a Bounce Back Loan or a CBIL will still be eligible for the new loans.

Further details are here.

Home office equipment – tax and national insurance exemption

Home office equipment is the equipment deemed necessary for the employee to work from home as a result of the coronavirus outbreak, and can for example include a laptop, a desk or necessary computer accessories.

During lockdown last year it was announced that expenses for home office equipment reimbursed to employees would be free of tax and national insurance.

The exemption was due to end on 5 April 2021 but will now be extended to have effect until 5 April 2022.

Coronavirus antigen tests – tax and national insurance exemption

During lockdown last year it was announced that that employees who are provided with, or reimbursed for the cost of, a relevant coronavirus antigen test by their employer would not not be liable to a National Insurance charge.

The exemption was due to end on 5 April 2021 but will now be extended to have effect until 5 April 2022, and will also be extended, with retrospective effect, to income tax.

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