Q1 2021 – What the March Budget Means for You and Your Business

The March 2021 Budget was one of the most anticipated in years. With the UK economy still recovering from the impact of COVID-19, the Chancellor announced a package of measures designed to support individuals and businesses while also setting out how public finances will be repaired in the future.

Here are some of the key takeaways for businesses and taxpayers:

Support Extended

• Furlough Scheme – The Coronavirus Job Retention Scheme has been extended until September 2021, giving employers ongoing support with staffing costs.
• Self-Employed Income Support Scheme (SEISS) – Sole traders and freelancers can access further grants, and for the first time, those who submitted 2019/20 tax returns are eligible.

Tax Changes

• Corporation Tax – From April 2023, Corporation Tax will rise to 25% for companies with profits over £250,000. Smaller companies (profits under £50,000) will continue to pay 19%, with a tapered rate in between.
• Income Tax Thresholds – The personal allowance and higher rate thresholds will rise slightly in April 2021 but will then be frozen until 2026.

Sector-Specific Support

• VAT Relief – The reduced 5% VAT rate for hospitality and tourism continues until September 2021, before moving to 12.5% until April 2022.
• Business Rates Holiday – Extended for eligible retail, hospitality, and leisure businesses until June, followed by reduced rates for the rest of the year.

What this means for you:
If you’re a business owner, this is the time to review your cashflow, take advantage of available support, and start planning for the higher tax environment from 2023 onwards. For individuals, freezing of thresholds could mean more people gradually pay more tax—so planning your income and allowances carefully will be key.