Today at 12.30 GMT the chancellor of the exchequer – the government’s chief finance minister – Rishi Sunak made his statement to MP’s in the House of Commons. It outlines the state of the economy and the plans for taxes. It also includes forecasts for how the UK economy could perform in the future.
No word about weddings
We can report that with no mention of the Wedding Sector, either in the chancellors speech or in the detailed budget document, that our Industry is once again ignored. Hospitality and personal care were addressed and with so many also working in the Wedding sector we know that some are happy to have been included.
So how will it affect you, personally, and in business?
We have taken some of the main points for you to take a glance at – this by no means covers everything from the Budget today and we suggest you take professional advice that suits your circumstances and for further reading please see the links at the bottom of this article.
Here are the key points at a glance.
Corporation Tax To balance the need to raise revenue with the objective of having an internationally competitive tax system, the rate of Corporation Tax will increase to 25% and will not take effect until 2023.
Businesses with profits of £50,000 or less, around 70% of actively trading companies, will continue to be taxed at 19% and a taper above £50,000 will be introduced so that only businesses with profits greater than £250,000 will be taxed at the full 25% rate.
Business Rates 750,000 eligible businesses in the retail, hospitality and leisure sectors in England will benefit from business rates relief.
Income tax, national insurance contributions and VAT These have will not rise however the threshold (the rate over which people start paying tax) will freeze at £12,570 from next year and kept at this rate until April 2026. The higher rate threshold will similarly be increased next year, to £50,270, but will then also be frozen until 2026. Ultimately this means many will pay more in tax from 2022.
The personal allowance level applies across the UK but the higher rate threshold for non-savings and non-dividend income will apply to taxpayers in England, Wales, and Northern Ireland
VAT –The 5% reduced rate of VAT for the tourism and hospitality sector will be extended for six months. It will now last until the end of September, with an interim rate of 12.5% for another six months after that.
Universal Credit £20 weekly increase extended for a further 6 months.
In addition, working tax credit claimants will get equivalent support for a further six months. For full details, see our Universal Credit £20/week uplift to continue for a further six months
Furlough The Coronavirus Job Retention Scheme employers will be expected to pay 10% towards the hours their staff do not work in July. Their contribution will increase to 20% in August and September, as the economy reopens, but employees will continue to receive 80% of their salary for hours not worked until the scheme ends. It had been due to close at the end of April. For full details, see our Furlough and self-employed income support extended
SEISS payments A fourth grant, covering February, March and April, will be available to claim from April, (no exact date announced at time of publish) worth 80% of three months’ average trading profits up to £7,500. There will be a fifth and final SEISS grant covering May to September, details to be announced.
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.
Previously excluded Mr Sunak faced criticism that newly self-employed people were unable to benefit from the scheme previously so today 600,000, previously excluded, will now be covered under the wider eligibility criteria. It now says those who’ve filed a 2019/20 return may also be eligible.
Am I eligible? Take a look here Coronavirus Self-Employed & Small Limited Company Help (moneysavingexpert.com)and Check if you can claim a grant through the Self-Employment Income Support Scheme – GOV.UK (www.gov.uk) keep checking the Gov.uk website for details as they are published.
Stamp Duty The current stamp duty holiday (in England and NI) will be extended until the end of June. The £500,000 nil rate band will now continue until the end of June. After that, until September the nil rate band will be reduced to £250,000, before returning to the usual £125,000.
A new mortgage guarantee scheme to help buyers with a low deposit. Starting in April many of the leading major lenders will offer 5% rates. This will enable all UK homebuyers to secure a mortgage up to £600,000 with a 5% deposit. For more details, see our New mortgage scheme for buyers with 5% deposit guide.
Restart Grants £5 billion has been made available for new Restart Grants, this will be a one off cash grant of up to £18,000 for hospitality, accommodation, leisure, personal care and gym businesses in England.
New Recovery Loan Scheme From 6th April, businesses including those that have received a CIBL or BBL (existing coronavirus guaranteed loan schemes) can also apply for a new Recovery Loan Scheme. This will make loans between £25,001 and £10 million available plus asset and invoice finance between £1,000 and £10 million, to help businesses of all sizes through the next stage of recovery. Get advice, if necessary, from a financial body or advisor before taking action.
Contactless payment increase The contactless payment limit will rise to £100 up from £45 and officially takes effect from today, though in practice it may take longer for retailers to implement the increased limit.
Alcohol and fuel duty will be frozen. This will be positive news for venues and bar companies who serve alcohol. It is the second year in a row for the duty on alcohol to be frozen and over a decade for the fuel freeze.
Inheritance tax thresholds, the pensions lifetime allowance and the annual exempt amount in capital gains tax will be maintained at current levels. They’ll stay the same until April 2026.
The Devolved Nations
Wales control some income taxes but ministers have decided to keep to the main UK levels.
Scotland has income tax raising powers and in Northern Ireland the Assembly has less control over taxes.
This is a basic roundup of some of the Budget announcements today by the chancellor – this, in no way, covers everything and to find out what will affect you, personally, and your business we advice further reading of the following links ; Budget 2021: What you need to know – GOV.UK (www.gov.uk) and Budget_2021_Web_accessible.pdf (publishing.service.gov.uk)
To support those continuing to campaign for our sector please follow @whataboutweddings and @uk_weddings.org and your specific Industry area associations, organisations and bodies, some of which are on our Resources page.