2021 Budget

Coronavirus Job Retention Scheme (CJRS)

The Budget confirms the continuation of the CJRS in its current form until the end of June 2021.

As the economy reopens and demand returns, the government will introduce employer contributions towards the cost of unworked hours until September 2021.

From July, the employer contribution towards the cost of unworked hours will be 10% in July, 20% in August and 20% in September.

Personal Allowance

The income tax Personal Allowance and higher rate threshold (HRT) will be updated in line with Consumer Price Inflation (CPI) as planned in April 2021, then maintained at that level until April 2026.

Personal income tax allowance will be frozen at £12,570 from April 2022 to 2026.

Higher rate income tax threshold to be frozen at £50,270 from 2022 to 2026.

Self-Employment Income Support Scheme (SEISS) Fourth and Fifth Grants

The fourth grant will be worth 80% of three months' average trading profits, paid out in a single instalment and capped at £7,500 in total. The grant will cover the period February to April, and can be claimed from late April. You must have filed a 2019-20 Self Assessment tax return to be eligible for the fourth grant. All other eligibility criteria will remain the same as the third grant. 

The fifth grant is the final grant covering May to September. The value of the grant will be determined by a turnover test. People whose turnover has fallen by 30% or more will continue to receive the full grant worth 80% of three months' average trading profits, capped at £7,500.  People whose turnover has fallen by less than 30% will receive a 30% grant, capped at £2,850. The final grant can be claimed from late July. 

National Insurance Contributions (NICs)

As previously announced and legislated for in February 2021, in 2021-22 NICs thresholds will rise with CPI, bringing the NICs Primary Threshold/Lower Profits Limit to £9,568 and the Upper Earnings Limit (UEL)/Upper Profits Limit (UPL) to £50,270, in line with the income tax HRT.

The UEL/UPL will then remain aligned with the HRT at £50,270 until April 2026. All other NICs thresholds will be considered and set at future fiscal events. NICs thresholds apply across the UK.

Corporation tax

The rate of corporation tax will increase from April 2023 to 25% on profits over £250,000. The rate for small profits under £50,000 will remain at 19% and there will be relief for businesses with profits under £250,000 so that they pay less than the main rate. 

More detailed information can be found on the following Links:

Job Retention Scheme (CJRS) 

Income Tax and National Insurance contributions 

SEISS Fourth and Fifth Grants  

Corporation tax