UK Budget Briefing (March 4)

UK Government Budget Briefing

UK Government Budget Briefing

The UK Government presented the 2021 budget on March 3 and this briefing paper addresses the key financial implications for PGA Members arising from the announcements made by the Chancellor of the Exchequer.

The paper does not address taxation matters such as personal allowances, future corporation tax rates, VAT rate transitions and other similar details which are general in nature.

This information is for briefing only. It is not intended to be prescriptive and necessary professional advice should be sought where appropriate.

Employment and Self-Employment

Self Employed Income Support Scheme (“SEISS”) – Grant 4

  • Fourth grant has been confirmed – covers the period Feb-Apr 2021
  • In a change from earlier grants, the 4th grant will take into consideration the self-employed individual’s 2019/20 tax return (previously 2018/19 and earlier) as long as the 2020 tax return has been submitted to HMRC by 2 March 2021 (if not eligible based on these returns HMRC will look at the earlier tax years to determine eligibility)
  • In a further change to earlier grants, businesses will need to confirm they have suffered “a significant financial impact due to coronavirus”
  • Payment is 80% of 3 months average trading profit
  • Paid in a single instalment capped at £7,500 for the 3 month period
    Trading profits must be <£50,000 and no more than 50% of the individual’s total income
  • Individuals must have been self-employed and trading in both 2019/20 and 2020/21
  • Must be currently trading and impacted due to COVID, or have been trading and temporarily unable to do so due to COVID
  • Claims can be made between late April and 31 May
  • 1st time claimants will need to provide additional evidence of eligibility in support of their claim e.g. their last P60 and last 3 payslips
  • As previously, no support available for owner-managed businesses (i.e. company directors paid largely via dividends)

Further details can be found here.

Self Employed Income Support Scheme (“SEISS”) – Grant 5

  • 5th grant has also been announced covering May-Sept, claimable from late July (details to follow)
  • 5th grant will be computed based on turnover reductions, above and below 30%

Coronavirus Job Retention (Furlough) Scheme

  • Extended to 30 Sept 2021
  • For periods ending on or before 30 April 2021, claims can be made for employees who were employed on 30 October 2020
  • For periods starting on or after 1 May 2021, claims can be made for employees who were employed on 2 March 2021
  • 80% of wages up to £2500 per month for May and June
  • 70% of wages up to £2187.50 for July
  • 60% of wages up to £1875 for August and September
  • Employers to start contributing for hours not worked:
    - July – 10% up to £312.50
    - Aug and Sept – 20% up to £625
  • For all of these months, for hours not worked employees still get 80% of salary

Further details can be found here.

National Minimum Wage

  • From 1 April 2021 the National Living Wage and the National Living Wage will align and apply to employees aged 23 and over
  • Increases to £8.91 (from £8.72) from beginning April for employees aged 23 and over
  • Proportionate increase in National Minimum Wage for younger age bands

Full 2020/21 rates are detailed here.

Universal Credit

  • £20 per week increase in the level of Universal Credit has been extended until 30 September

Business

Restart Grants

For England only

  • To help businesses reopen as lockdown restrictions lift
  • Retail firms can apply for up to £6k per premises and hospitality businesses up to £18k
  • Must occupy a premises that pays business rates
    Has had to close from 5 January 2021 or between 5 November and 2 December 2020
  • Has been unable to provide its usual in-person customer service from its premises
  • Might be of use to golf clubs/driving ranges etc
  • Applications via local council websites (Note – these websites should also be used by PGA Members to access information on local Discretionary Grants which may from time to time be made available by Government in England via individual local authorities, including the £425m announced for England in the budget statement)

Find your local council here.

Note – the governments in the other UK nations may announce something similar in future, dependent on Barnett consequential funding etc.

Business Rates

For England only

Business rates to be subject to 100% discount for the 3 months ended 30 June 2021
66% reduction for the remainder of the tax year (to 31 March 2022)
No need to apply for discounts

Note - Different arrangements in the other three UK nations – details will be announced outside of the budget statements

Capital Allowances

Super Deduction Scheme

  • Applies to companies within the charge of Corporation Tax
  • An enhanced capital allowance scheme related to expenditure on capital assets, primarily plant and machinery
  • Available from 1 April 2021 to 31 March 2023
  • Mainly targeted at industries in the infrastructure, manufacturing, utilities and construction sectors which, by their nature, need to spend a lot on new plant and machinery
  • “Qualifying” capex assets are still to be fully defined
  • Encourages firms to invest in productivity through enhancing their plant and machinery, and by accelerating that investment to offset the low levels of it during the pandemic
  • Appears likely to apply to new qualifying assets only (not 2nd hand) and which would be included in the main plant and machinery capital allowance pool
  • For qualifying capex, a potential “super deduction” of 130% can be claimed from a tax bill – basically a 25p cut in the tax bill for every £1 invested in new plant and machinery
  • Only applicable to limited companies, and direct relevance to golf projects will become clearer when the absolute detail of the scheme is published

Further information available here.

 

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