COVID-19 support – furlough and SEISS extended to September

Recovery loan scheme

The recovery loan scheme ensures businesses can access loans and other finance of up to £10m per business once existing COVID-19 loan schemes close. The Government guarantees 80% of the finance to the lender. The scheme launches on 6 April 2021 and is open until 31 December 2021.

Finance terms are up to six years for term loans and asset finance facilities and up to three years for overdrafts and invoice finance facilities.

No personal guarantees will be taken on facilities up to £250,000, and a borrower’s principal private residence cannot be taken as security.

Businesses that have received support under existing COVID-19 guaranteed loan schemes will still be eligible to access this scheme.

Furlough scheme

The Government is extending the furlough scheme until the end of September 2021.

Employees will continue to receive 80% of their current salary for hours not worked with no employer contribution beyond NICs and workplace pensions required in April, May and June 2021.

From July 2021, the Government will introduce an employer contribution towards the cost of unworked hours of 10% in July 2021, 20% in August 2021 and 20% in September 2021.

Restart grants

Non-essential retail businesses in England will be eligible for grants of up to £6,000 per premises, while hospitality, accommodation, leisure, personal care and gym businesses may get up to £18,000.

Business rates

Eligible retail, hospitality and leisure properties in England will continue to benefit from 100% relief until 30 June 2021.

The relief will be reduced to 66% from July 2021 until the end of March 2022 with a cap of £2m per business for properties required to close on 5 January 2021 or £105,000 for other eligible properties.

Self-employment income support scheme (SEISS)

The Government confirmed that the fourth SEISS grant will be worth 80% of three months’ average trading profits, paid out in a single instalment and capped at £7,500 in total.

It will cover the period from February to April 2021 and can be claimed from late April. Self-employed individuals must have filed a 2019/20 tax return through self-assessment by midnight on 2 March 2021 to be eligible for the fourth grant.

A “fifth and final” SEISS grant will cover May to September 2021. Those whose turnover has fallen by 30% or more will receive the full grant worth 80%, capped at £7,500. Those 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.

Following the extension of the SEISS into the 2021/22 tax year, grants will now be included as income in the tax year in which they are received.

The rule will continue not to apply to any payments made to a partner distributed across the partnership, which is treated as income of the partnership.

A further extension of legislation will be applied to raise a tax charge equivalent to the amount of a SEISS grant to be recovered, where entitlement expired.

Statutory sick pay (SSP)

Small and medium-sized employers across the UK will be able to continue claiming up to two weeks of eligible SSP costs per employee. No closure date has been announced.

 

Other announcements: SDLT holiday continues to end of June

Stamp duty land tax (SDLT)

Due to COVID-19, the Chancellor previously announced a temporary increase to the nil-rate band for residential property before SDLT was due, from £125,000 to £500,000, for the period 8 July 2020 to 31 March 2021.

Budget 2021 announced a staged withdrawal of this measure by extending it to 30 June 2021, then introducing a nil-rate band of £250,000 from 1 July 2021 to 30 September 2021.

This will apply to transactions in England and Northern Ireland with an effective date between 1 April 2021 and 30 September 2021.

Mortgage guarantee scheme

A new mortgage guarantee scheme will kick in from April 2021, providing a guarantee to lenders across the UK who offer mortgages to people with a deposit of just 5% on homes with a value of up to £600,000. The scheme will be available for new mortgages up to 31 December 2022.

Late payments & late submissions

A new points-based penalty regime is coming in for regular tax return submission obligations, which will replace the existing penalties for VAT, income tax and self-assessment.

Those who persistently do not comply by missing filing deadlines will be issued fixed financial penalties of £200 once a points threshold has been breached.

If they continue to miss submission deadlines after this point, they will become liable for a further fixed-rate penalty for each additional missed obligation.

The late-payment penalty regimes across the main taxes will also be aligned, with the new late-payment penalty consisting of two separate charges.

As was previously the case, a taxpayer will not be liable to a point or penalty if they had a reasonable excuse for late filing, and will have a right to appeal against both points and penalties.

Duties

Fuel duty and short-haul air passenger duty remain unchanged, as do alcoholic duties for beer, cider, wine and spirits.

Landfill tax

Landfill tax is charged in England and Northern Ireland on material disposed of at a landfill site.

Standard and lower rates are being increased on 1 April 2021 to £96.70 per tonne and £3.10 per tonne, respectively.

Vehicle excise duty (VED)

The Government has announced VED rates for cars, vans and motorcycles will increase in line with the Retails Prices Index (RPI) from 1 April 2021.

Red diesel

From 1 April 2022, the use of red diesel and rebated biofuels will be restricted to qualifying purposes only.

The measure is aimed at incentivising business to move to more energy-efficient alternatives.

Tobacco duty

The rates of duty previously announced will be consolidated into Finance Bill 2021, increasing the duty rates on all tobacco products by RPI plus 2% and on hand-rolling tobacco products by RPI plus 6% with effect from 16 November 2020.

Gaming duty

Gross gaming yield bands for gaming duty will increase in line with inflation from 1 April 2021.

Aggregates levy

The Government will freeze the aggregates levy rate for 2021/22, but intends to return to index-linking in future.