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Budget 2021: How it will affect you

The government unveiled their much-anticipated Spring 2021 Budget on 3rd March. This Budget has some far-reaching implications for business owners. There is lots to take in, so to make your life easier, we have reviewed all the information provided by the Government and summarised it below. 

The three key goals of the budget are:

  • Continuing Corona-crisis support for businesses and individuals.
  • Presenting a plan to re-pay the deficit created by the Corona measures.
  • Helping to shape UK’s post-Brexit economy.

Here is a summary of the budget highlights:

  • Furlough is to be extended to September.
  • Further SEISS payments to the self-employed. Scheme extended to individuals previously excluded.
  • Further grants will be made available to shops and similar business that were forced to close due to Corona.
  • Corporation tax to rise to 25% in 2023.
  • Enhanced tax incentives for companies investing in plant and machinery.

Below is a breakdown of the main points, but please be aware that the detailed legislation is now being drafted and this could introduce important modifications to these announcements, so you do need to keep your eye out for changes. We will of course try to keep you informed.

Your Personal Finances:

  • There is no change to income tax or national insurance rates. However, as of April 2022, Personal Income Tax thresholds will increase as follows:
    • Tax free allowance increasing from £12,500 to £12,570.
    • Higher rate tax threshold increasing from £50,000 to £50,270.
    • These levels will remain frozen until April 2026.
  • Despite rumours of planned changes, there are no changes to capital gains tax or inheritance tax. 
  • The £20 uplift in Universal Credit, worth £1,000 a year, is to be extended for another six months.
  • Working Tax Credit claimants will receive a £500 one-off payment.
  • Later this year, the contactless payment limit will rise to £100.
  • There will be no duty increase on fuel and alcohol. Cheers!

Your Business:

  • There is no change to VAT
  • As of April 2023, companies with profits greater than £50,000 will see an increase in corporation tax, from the current rate of 19%. This increase will be tapered so that profits greater than £250,000 will be taxed at 25%. 
  • Minimum wage is to increase to £8.91 an hour from April 2021.
  • There will be enhanced capital allowances for a two-year period for expenditure in plant and machinery: for every £1.00 invested, you can claim £1.30. This is available to limited companies only. We expect a lot of detailed rules to follow to ensure this relief is properly targeted. For example, we would like to know if the purchase of a van will qualify. 
  • Grants for apprenticeships are to rise to £3,000. This scheme is open to apprentices of all ages.
  • A new ‘Help to Grow’ scheme was also announced, which will provide executive training courses and support for digital management tools.


  • The stamp duty holiday on house purchases in England and Northern Ireland has been extended to June, with no tax liability on sales of less than £500,000. Partial reduction in stamp duty will be continued to the 30th of September.
  • There are no changes to the way capital gains tax rules when selling a property. However, please note that you must report property sales that are not your main property, within 30 days of the sale.
  • It was announced that government-backed 95% mortgages are to be available from next month.

Corona-Crisis Support:

  • Furlough is to be extended until the end of September. Employees will continue to receive 80%, but employers will be asked to be asked to contribute 10% in July and 20% in August and September.
  • SEISS: Support for the self-employed has been extended until September, with a 4th and 5th tranche. For the first time, individuals who became self-employed during the 19/20 tax year will be eligible. The amount you can claim will depend on how badly your sales were affected. Claims for the 4th grant can be made in April.
  • VAT for hospitality businesses will remain at the reduced 5% rate until September, and then increase to 12.5% for a further 6 months.
  • Business rates holiday for firms in England to continue until June. This will be followed by a further six-month period where rates will be discounted to two-thirds of the normal charge.
  • Restart grants will be introduced for shops and other businesses forced to close. Businesses may be eligible for:
    • £6,000 per premises for non-essential outlets due to re-open in April
    • £18,000 for gyms, personal care providers and other hospitality and leisure businesses. 

You can access the full budget here. If you would like to talk to us about how you may be affected by these changes, please feel free to get in touch with us.


While we make every effort to make sure this guide is accurate and up to date, you should take professional advice before acting on the information provided here. If you contact us, we will be happy to help. Beans cannot take responsibility for actions taken and losses incurred as a result of actions taken or not taken based on the information provided here.

Budget 2021: How it will affect you
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