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Chancellors Budget 2021 – what was announced?

Rishi Sunak, Chancellor, announced the 2021 budget yesterday (3rd March 2021), which included several support measures for practices.

Furlough

The Coronavirus Job Retention Scheme is being extended until 30th September 2021.

Until 30th June 2021, the government will contribute 80% of a furloughed employee’s wages up to a maximum of £2,500 per month. Practices will only be required to contribute National Insurance (NI) and pension contributions. From 1st July 2021, practices will be required to contribute 10% of a furloughed employee’s wages with the government contributing 70%. From 1st August 2021, practices will be required to contribute 20% of a furloughed employee’s wages with the government contributing 60%. These payments will be in addition to existing NI and pension contributions.

Practices are still expected to pay employees for the hours worked if they are utilising the flexible furlough scheme.

Eligibility criteria in relation to new starters at the practice has also been amended. For furlough periods on for before 30th April 2021, practices can claim for employees who were employed on for before 30thOctober 2020, providing that a PAYE Real Time Information (RTI) submission to HMRC had been made for the employee between 20th March 2020 and 30th October 2020. For periods on for after 1stMay 2021, practices can furlough and claim for employees who were employed on 2nd March 2021, providing that a PAYE RTI submission has been made for the employee between 20th March 2020 and 2nd March 2021.

Please see additional information here.

Self-Employment Income Support Scheme (SEISS)

A fourth grant under the SEISS scheme has been confirmed at 80% of 3 months’ average trading profits, paid out in a single instalment, capped at £7,500.

The fourth grant will take into account 2019 to 2020 tax returns and will be available to those who became self-employed in the tax year 2019 to 2020. The remaining eligibility criteria remains unchanged.

It has also been confirmed that there will be a fifth and final grant covering May to September 2021. This will be either 80% of 3 months’ average trading profits, capped at £7,500 for those with a turnover reduction of 30% or more; or, 30% of 3 months’ average trading profits, capped at £2,850, for those with a turnover reduction of less than 30%.

Please see additional information here.

Apprentices and Trainees

Additional support for practices taking on apprentices is being introduced, with the incentive payment doubling to £3,000.

£7 million is also being made available for a new “flexi-job” apprenticeship programme in England, that will enable apprentices to work with a number of practices.

An additional £126 million is being made available for 40,000 traineeships, in England. This will fund training for 16 to 24 year olds in the 2021/22 academic year.

Additional information on the above is expected to be released in due course.

‘Help to Grow’ scheme

It was also announced that two ‘Help to Grow’ schemes would be introduced.

The first in relation to the government supporting with management training for decision makers in businesses who have been operating for more than 1 year, with between 5 to 249 employees.

The second scheme is in relation to support with digital technology. Businesses will be able to access free impartial advice on how technology can boost their performance through a new online platform. Business may be able to get a discount if up to 50% on the costs of approved software, worth up to £5,000.

Please see further information here.

Recovery Loan Scheme

A new loan scheme is being introduced to support access to finance, that will run until the end of 2021. The scheme will cover borrowing between £25,000 and £10 million.

Please see further information here.

‘Super-deduction’ on tax

From April 2021 for two years, the new ‘super-deduction’ will cut companies tax bills by 25p for every pound that they invest in new equipment.

Please see additional information here.

For further information on the budget 2021 please see here.