Page 12 - Budget 2021

PLANNING POINT

The exemption given from the OpRA rules to low emission vehicles makes these worth considering if you want
to exchange salary for a company car.

For 2021/22 there is a new NIC relief for employers of armed forces veterans entering civilian employment. The relief
will mean that during the first 12 months of employment, the employer will have no secondary Class 1 NIC liability.

The upper earnings limit for Class 1 (employed) contributions (and the upper profits limits for Class 4 (self-employed)
contributions) will be frozen at £50,270 from 2021/22 to 2025/26.

Business Rates

In 2020/21 there was a range of initiatives on business rates and grants based on business rateable values, the most
significant of which was probably the one-year business rates holiday for retail, hospitality and leisure businesses,
which was due to end on 31 March 2021. The 100% business rates relief for eligible businesses in England will now
continue to 30 June 2021. A 66% business rates relief will apply until 31 March 2022. The new relief will be capped at
£2 million per business for properties that were required to be closed on 5 January 2021, or £105,000 per business for
all other qualifying properties. Nurseries will also qualify for relief in the same way.

Employment Support Schemes.

The Coronavirus job retention scheme (CJRS or furlough scheme) will be extended to 30 September 2021 and will
continue to offer employees 80% of their current salary for hours that are not worked. Until 30 June, the government
support payment will remain 80% (capped at £2,500 a month), with employers continuing to be responsible for NICs
and workplace pension contribution. The government support then reduces to 70% in July, followed by 60% in the
final two months of the scheme.

The self-employed income support scheme (SEISS) will also be extended to September 2021, although details are less
clear. A previously announced fourth SEISS grant will cover the period from February to April, worth 80% of three
months’ average profits (capped at £7,500). Claims for this grant can be made from late April. A new, fifth grant,
claimable from late July, will cover the remaining period to September 2021. The government says this will be worth:

• 80% of three months’ average profits where the claimant’s turnover has dropped by 30% or more; and.

• 30% of profits (capped at £2,850) where the fall in turnover is below 30%.

The eligibility for the fourth and fifth grants will be broadened to include those who became self-employed in 2019/20
and have filed a tax return for that tax year.

Off-payroll Working

After a 12 month deferral, from 6 April 2021 the off-payroll working rules will start to apply to private and third sector
employers. This will place the onus on employers to decide whether a contractor working through a personal service
company falls within the IR35 tax rules. In early 2020, before the deferment was announced, some large companies

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