What Self-Employed Professionals Should Know about the 2021 Budget
What Self Employed Professionals Should Know About the 2021 Budget
Chancellor Rishi Sunak has now announced the much-awaited 2021 Budget. Setting out the governments tax and spending plan for the year ahead.
This is without a doubt one of the most anticipated budgets yet due to the Covid-19 pandemic, resulting in higher demand than ever for government measures to help businesses and jobs recover.
This article will cover the main areas of the budget self-employed professionals need to be aware of. Below is a list of all the articles we have released to cover the 2021 Budget. Feel free to get in touch with any specific questions.
How the 2021 Budget will affect High-Net worth individuals
What the 2021 Budget means for Corporates
Areas of the 2021 Budget that are aimed at supporting minorities
How the Budget will affect mutual funds and the stock market
The 2021 Budget and the Property Market
Highlights of the 2021 Budget for self-employed professionals
As expected, the Chancellor's 2021 Budget's core focus is on continued support as the UK moves towards what hopefully will be the end of the Covid-19 Pandemic this year. The Self-Employed were and are one of the worst-hit by the pandemic. As a result, the budget outlines several measures that will be of particular benefit for self-employed professionals, contractors and freelancers.
The self-employed furlough scheme (SEISS) extended to the new freelancers.
The self-employed furlough scheme (SEISS) has been extended to new freelancers and contractors who filed their first tax return for the 2019/20 tax year. Therefore over 600,000 people can now claim a SEISS grant. This is the 4th self-employment grant announced and will be followed by a 5th SEISS 5.
Although many are relieved to hear they will be receiving support, there is a lot of concern around the date to which the grant will be released: "Late April". One of our clients, a self-employed Yoga Teacher, has stated that the "delayed date is a massive blow and shock. It will be a real struggle financially making it to the end of April- hopefully, something changes".
Minimum Income Floor Removed for Self-Employed on Universal Credit
The minimum income floor for Self-Employed individuals on universal credit has been removed. This will be in place until late August.The minimum income floor is a controversial system used to calculate Universal Credit Payments for Self-Employed Professionals.
Many will welcome the continued removal of the minimum income floor, as those who are not entitled to the Governments financial support scheme can instead receive Universal Credit.
Income tax thresholds frozen
The Income Tax Thresholds will be frozen until 2026. Over raising income tax, Sunak has favoured the method of "fiscal drag". This is a deflationary effect; as wages rise, a higher proportion of income is paid in tax.Below is a great explanation of fiscal drag for those wanting to understand the topic further
