UK Budget 2021: Key points at a glance

Never a dull day in the ol' House of Commons .. and yesterday was no exception as Chancellor Rishi Sunak revealed the contents of his highly anticipated budget, after what was a year like no other (unless you're an inhabitant on Uranus where you are used to your years lasting for 84 Earth Years) *Raises his Babel Fish to his ear .. 'Nanu Nanu and Welcome!' to our Uranian readers.

Uncle Rishi laid down his governments tax and spending plans for the year ahead. These included :

• New measures to assist business and jobs through the pandemic
• Plans to support the UK's long-tern recovery
• Tax-raising policies to rebalance the public finances

Here is a TAXO'D summary of the main points for Freelancers and the Self Employed.

HIGHLIGHTS : SEISS dates given for fourth grants, extended to a fifth grant and more eligibility for those who have missed out on last 3 grants. (For the employed - Furlough Extended.)

SEISS

Self-Employment Income Support Scheme (SEISS) has been extended – and for the first time since the scheme launched its scope will now be widened to include some of those who weren’t eligible for grants 1,2 and 3.

TL:DR

• The fourth SEISS grant (covering February, March and April) will now be worth 80% of trading profits for three months, capped at £7,500.
• Fourth SEISS grant applications will open sometime in April.
• More newly self-employed people will now be eligible to apply. While previously you must have filed a tax return for 2018/19 to apply, it now says those who’ve filed a 2019/20 return may also be eligible (Reportedly opening the grant to 600,000 more people)
• A FIFTH SEISS grant will be also be available covering May-September 2021) and this will supposedly be the last. The value of the grant will be determined by a turnover test. People whose turnover has fallen by 30% or more will continue to receive the full grant worth 80% of three months’ average trading profits, capped at £7,500. People whose turnover has fallen by less than 30% will receive a 30% grant, capped at £2,850. The final grant can be claimed from late July.The Government says further details will be published in due course.

When you can claim the fourth grant

HMRC will contact self-employed workers it believes are eligible for the grant from mid-April.

Those eligible will be provided with a personal claim date, which will be the earliest date you can submit a claim.

All claims for the fourth SEISS grant must be made by 31‌‌ ‌May 2021.

The fifth SEISS grant

Sunak also announced that there will be a fifth and final SEISS grant, covering the period between May and September.

Claims for this grant will be open from July.

The amount of the fifth grant will be determined by how much your turnover has been reduced. The grant will be worth 80% of three months’ average trading profits, capped at £7,500, for those with a reduction in turnover or 30% or more.

For those with a lower reduction in turnover, of less than 30%, the grant will be worth 30% of three months’ average trading profits.

Further details will be provided on the fifth grant in due course.

FURLOUGH

The furlough scheme – which is officially known as the Coronavirus Job Retention Scheme and covers some of the wages of employees who can’t work – had officially been due to close at the end of April. It’s already been extended multiple times though – and now that’s happened again.

• Furlough will now run until the end of September across the UK. However, from July onwards the state’s contribution to that will gradually reduce, with employers asked to contribute more (see more info below).

ECONOMIC GROWTH

• The chancellor says the economy will recover more quickly from the pandemic than previously thought, with the economy returning to its pre-pandemic size six months earlier, by the middle of next year.
• The chancellor says that in five years’ time the economy will still be 3% smaller than it otherwise would have been without Covid19.

UNIVERSAL CREDIT

• The £20-a-week increase in universal credit is extended for six months.

DUTIES

• Alcohol duties will be frozen for the second year in a row. (Frozen alcohol? Like a margarita?)
• Fuel duty will also be frozen. (That's gonna be tricky to pump)

HOUSING

• The stamp duty holiday on properties up to £500,000 continues until the end of June. It will be kept at double its standard level until the end of September, and then return to usual levels from 1 October.
• The chancellor confirms a mortgage guarantee to help first-time buyers access 95% mortgages.

BUSINESS SUPPORT

• The chancellor confirms the £5bn restart grant for businesses to help companies get going after lockdown.
• He says total direct cash support to businesses has reached £25bn.
• As the government-backed bounce back loan (BBL) and coronavirus business interruption loan scheme (CBILS) come to an end, the Treasury is launching a new loan scheme to run until the end of the year. Loans can be between £25,000 and £10m.
• Hospitality and leisure businesses pay no business rates for three months, then rates will be discounted for the remaining nine months of the year by two-thirds, in a £6bn tax cut.
• 5% reduced rate of VAT will be extended until the end of September. Then it will be gradually increased, at 12.5% for six months, before returning to the standard rate from April 2022. Sunak says this is a cut worth £5bn.

What are your thoughts? There was a lot in there we were expecting .. and we were glad to see the umbrella of SEISS being pushed out to included the newly self-employed. Not to mention the SEISS grant fourth being given a date and a grant amount AND the news of a fifth SEISS grant. All in all (fairly) HAPPY DAYS.

While you are here (from Uranus right?) Listen ..

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Disclaimer: This is simply a guide and should not be treated as tax advice. Contact HMRC directly if you need tax advice.