Budget 2021

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than £16,000. Shortly after the 2020 Budget theChancellor announced an increase in the UniversalCredit standard allowance by £20 per week forone year.effort to tackle climate change. The green giltframework, to be published in June, will detail thetypes of expenditure that will be financed to meetthe government’s green objectives.The government is extending the temporary £20per week increase for a further six months.Working Tax CreditThe government is making a one-off payment of£500 to eligible Working Tax Credit claimants toprovide extra support over the next six months.Mortgage guarantee schemeThe government will introduce a new mortgageguarantee scheme in April 2021. This scheme willprovide a guarantee to lenders across the UK whooffer mortgages to people with a deposit of 5% onhomes with a value of up to £600,000.Under the scheme, all buyers will have theopportunity to fix their initial mortgage interestrate for at least five years should they wish to. Thescheme, which will be available for new mortgagesup to 31 December 2022, is designed to increasethe availability of mortgages on new or existingproperties for those with small deposits.Green National Savings andInvestment (NS&I) productThe government will offer a green retail savingsproduct through NS&I in the summer of 2021. Thisproduct will be closely linked to the UK’s sovereigngreen bond framework and will give all UK saversthe opportunity to take part in the collectiveVenture Capital Schemes:extension of the SocialInvestment Tax ReliefThe government will continue to support socialenterprises that are seeking growth investmentby extending the operation of Social InvestmentTax Relief to April 2023. This will continue theavailability of income tax relief and capital gainstax hold-over relief for investors in qualifyingsocial enterprises.Pensions Lifetime AllowanceThe lifetime limit sets the maximum figure fortax-relieved savings that an individual can build upover their lifetime.Legislation will be introduced to remove the annuallink to the CPI increase for the next five years. Thiswill maintain the standard Lifetime Allowance at£1,073,100 for tax years 2021/22 to 2025/26.4 Personal TaxBudget Summary 2021
EmploymentThe Coronavirus JobRetention Scheme (JRS)The current JRS allows an employer to place anemployee on furlough and apply for a grant tocover wage costs for the time an employee is onfurlough. The employer:• can claim 80% of ‘usual salary’ for hours notworked, up to a maximum of £2,500 per employee(pro-rated for hours not worked) per month• needs to fund employer National Insurancecontributions (NICs) and the minimum employerautomatic enrolment pension contributions.In December 2020, the Chancellor extended thescheme until the end of April 2021.Further extension of JRSIn Budget 2021 the Chancellor has furtherextended the scheme to 30 September 2021.The level of grant available to employers under thescheme will stay the same until 30 June 2021.From 1 July 2021, the level of grant will bereduced and employers will be asked to contributetowards the cost of furloughed employees’ wages.To be eligible for the grant an employer mustcontinue to pay furloughed employees 80% oftheir wages, up to a cap of £2,500 per month forthe time they spend on furlough.The reduction in the level of the grant means thatthe percentage recovery of furloughed wages willbe as follows:• for July 2021 70% of furloughed wages up to amaximum of £2187.50 and• for August and September 2021 60% offurloughed wages up to a maximum of£1,875.00.Employers will need to continue to fund employerNICs and mandatory minimum automaticenrolment pension contributions.CommentThe Chancellor has also extended eligibility forthe scheme. For periods starting on or after 1 May2021, employers can claim for employees whowere employed on 2 March 2021, as long as aPAYE Real Time Information (RTI) submission wasmade between 20 March 2020 and 2 March 2021,notifying a payment of earnings for that employee.Apprenticeships andtraineeshipsHigh quality traineeships for young peopleThe government will provide an additional £126million in England for high quality work placementsand training for 16-24 year olds in the 2021/22academic year. Employers who provide traineeswith work experience will continue to be funded ata rate of £1,000 per trainee.Payments for employers who hire newapprenticesThe government will extend and increase thepayments made to employers in England whohire new apprentices. Employers who hire anew apprentice between 1 April 2021 and30 September 2021 will receive £3,000 per newhire, compared with £1,500 per new apprenticehire (or £2,000 for those aged 24 and under)under the previous scheme.Budget Summary 2021 Employment 5
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Budget 2021

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