Chancellor Rishi Sunak recently delivered the 2021 Budget. Here are the key implications.

Furlough 

The furlough scheme (officially known as the Coronavirus Job Retention Scheme) was due to close at the end of April, and has now been extended until the end of September. Employees will continue to receive 80% of their wages for hours they can’t work due to Covid-19, up to £2,500 per month.  

In July, the government’s contribution will reduce to 70%. In August and September, the government will pay 60%. Employers will be expected to make up the difference to bring furlough wages up to 80%. 

What this means to you

If you’re an employer and not sure what to do, please give us a call.

For more information, see our Employment law services

Self-employed 

The self-employed income support scheme (SEISS) has been extended to reach 600,000 people who were previously excluded. Before, you could apply if you filed a tax return for 2018/19. Now, you may also be eligible if you filed a tax return in 2019/20. 

The amount of grant you receive depends on the impact on your turnover. If it’s fallen 30% or more, you can claim up to 80% of trading profits, maximum £7,500. If your turnover has fallen less than 30%, you can claim 30% of three month’s average trading profits, up to £2,850. We are still waiting to hear how average profits will be calculated, and over what time period the change in turnover applies. 

You can make a claim for the fourth grant in April (date to be announced), to cover February, March and April. The fifth and final grant will cover May to September, and can be claimed in July. 

What this means to you

If you have questions about any of these changes, please ask. We’ll be happy to help.

Stamp duty 

The current stamp duty holiday in England and Northern Ireland was due to end on 31 March, and has now been extended until the end of June. It means buyers don’t need to pay stamp duty on the first £500,000 of a property purchase. When stamp duty does become due again, it will apply to a reduced property value of £250,000 until September. After that, it will revert to the former level of £125,000. 

Residential property in Wales 

It’s different here in Wales, where Rebecca Evans MS, Minister for Finance and Trefnydd, reduced the threshold for land transaction tax (LTT) to £250,000 from July 2020 until 31 March 2021. This temporary reduction has now been extended to cover residential property purchases that compete before 30 June 2021, and will then revert to former levels.  

Note that this reduction doesn’t apply to properties which are liable to higher residential rates of LTT, nor to the purchase of investment homes and second homes. 

It’s reported that the initiative has had a positive impact on the Welsh housing market, meaning that only 25% of buyers have had to pay any LTT at all, and people buying properties worth over £250,000 saving £2,450. It’s therefore increased residential property transactions during 2020/21, and supported 10,000 taxpayers who bought homes in Wales between August and January. 

What this means to you

If you’re moving, now is a good time. Even without a pandemic, not all property transactions go smoothly, with potential development delays and mortgage difficulties. But we’re always here to deal with the conveyancing side of things. 

For details, please see our Residential property services.