Budget 2021 – What you need to know

Share This Post

Share on facebook
Share on linkedin
Share on twitter
Share on email

Chancellor Rishi Sunak has delivered his 2021 Budget today in Parliament setting out the tax and spending plans along with measures to support businesses and jobs through the current pandemic.

Delivering the budget, Suank said

This Budget meets the moment with a three-part plan to protect the jobs and livelihoods of the British people.

First, we will continue doing whatever it takes to support the British people and businesses through this moment of crisis.

Second, once we are on the way to recovery, we will need to begin fixing the public finances – and I want to be honest today about our plans to do that.

And, third, in today’s Budget we begin the work of building our future economy.

 Labour’s leaver Sir Keir Starmer responded by saying it was a Budget which “papers of the cracks” with no plan to rebuild a “shattered” economy.

The economy is expected to bounce back earlier than previously thought with the Office for Budget Responsibility expecting the economy to return to pre-covid levels by mid 2022.

Payroll Related Measures

The Chancellor announced a number of measures in the Budget that will directly affect UK payroll professionals and employees.

Extension of furlough

The Coronavirus Job Retention Scheme will be further extended until 30 September 2021. With support from government reducing from July. Although employees can still expect to receive 80% of their earnings, employers will be expected to share the burden.  From July, employers will need to make a contribution towards the cost of unworked hours of 10% in July, 20% in August and 20% in September.

Personal Allowance Frozen

The annual personal allowance will increase to £12,570 from April for the 2021/22 tax year. After this, the personal allowance will be frozen until 2026.

Higher Rate Threshold

The higher rate threshold for income tax will increase as planned to £50,270 from April 2021. The threshold will then be frozen until 2026. This applies to taxpayers in England, Wales and Northern Ireland only.

National Insurance Contributions Threshold

The Upper Earnings Limit will increase as planned to £50,270 from April 2021 keeping it inline with the income tax higher rate threshold.  The UEL will remain aligned with the HRT until 2026.

Pensions Lifetime Allowance

The pensions lifetime allowance will be maintained at the current level of £1,073,100 until April 2026

Exemption for COVID-19 tests

The income tax exemption and NICs disregard for COVID-19 antigen tests provided by, or reimbursed by employers will be extended to the 2021/22 tax year

Exemption for home office expenses

The income tax exemption and NICs disregard for employer reimbursed expenses covering the cost of home office equipment will be extended to the 2021/22 tax year

Taking on a new apprentice

Employers in England who hire a new apprentice between 1 April 2021 and 30 September 2021 will received £3,000 per new hire. This is in addition to the existing payments of £1,000 for apprentices aged 16-18 or those under 25 with an Education, Health and Care Plan.

Statutory Sick Pay Rebate Scheme

Eligible employers will continue to be able to claim up to two weeks of SSP for eligible employees who are absent for COVID-19 related eligible illness, isolation or shielding. The government will set out in the future the steps for closing down this scheme.

Cycle to work scheme

Updated so that the requirement that cycle or cyclist’s safety equipment is used mainly for commuting etc to be treated as met for the period commencing with 16 March 2020 and ending with 5 April 2022 in relation to the provision for an employee of a cycle or cyclist’s safety equipment that was first provided before 21 December 2020

 

 

Subscribe To Our Newsletter

Get updates and learn from the best

More To Explore

Do You Want To Boost Your Business?

drop us a line and keep in touch

Share on Facebook Share
Share on TwitterTweet
Share on Pinterest Share
Share on LinkedIn Share
Share on Digg Share