Welcome to the March 2021 Newsletter from Certax Accounting
The Institute for Fiscal Studies (IFS) has called on Chancellor Rishi Sunak to outline plans for an economic recovery from the coronavirus (COVID-19) pandemic in the 2021 Budget on 3 March.
Meanwhile, the government recently announced a £1,000 bonus to encourage employers to take on new trainees. The bonus, which is available until the end of July, aims to help businesses with the costs of providing work placements for trainees.
IFS urges Chancellor to outline economic recovery plans in upcoming Budget
The Institute for Fiscal Studies (IFS) has urged Chancellor Rishi Sunak to use the upcoming Budget to set out plans for an economic recovery from the COVID-19 pandemic.
The IFS expects the Budget to outline additional spending to support businesses and individuals affected by the pandemic. The business group stated that it should also focus on supporting the recovery as restrictions are eased.
In its Budget submission, the IFS said that the Chancellor needs to announce 'well-targeted extensions in emergency support to households and employers' over the coming months. He also needs to set out plans for how the UK economy will adjust to the 'new normal', the IFS said.
'This will be just Rishi Sunak's second Budget, but his 15th major fiscal announcement,' said Paul Johnson, Director of the IFS.
'In it he needs to strike a balance between continuing support for jobs and businesses harmed by lockdowns, and weaning the economy off blanket support which will impede necessary economic adjustment. Any significant continuation of the furlough scheme must be limited and carefully targeted.
'In the recovery phase he needs to support jobs and investment, but also crucially needs to recognise and address the multiple inequalities exacerbated by the crisis.'
The 2021 Budget will be delivered on Wednesday 3 March.
Government announces £1,000 bonus to help businesses take on trainees
The government recently announced that employers can now apply for a £1,000 cash boost to help them take on new trainees.
The new scheme aims to support young people in gaining the skills and experience they need from the very start, helping them to get a job, an apprenticeship or to pursue further study.
The cash boost – which is available until 31 July 2021 – will help businesses with the costs associated with providing a high-quality work placement for a trainee. This includes providing facilities, uniforms or helping with travel costs.
Businesses offering new traineeship opportunities will receive the £1,000 bonus for every trainee they take on, with up to a maximum of ten trainees.
Employers can claim the cash incentive for all work placements that have been completed since 1 September.
Gillian Keegan, Minister for Apprenticeships and Skills, said: 'We're pulling out all the stops to help young people get the skills and confidence they need to progress. This cash boost will help employers of all sizes provide more traineeship opportunities to invest in their workforce so they can rebuild and grow, giving young people a vital route to start their apprenticeship journey, get their first job or go on to further study.
'I strongly encourage as many employers as possible to apply now and take advantage of this fantastic offer so more young people can gain the skills they need to progress in their careers as we build back better from the pandemic.'
ESSENTIAL TAX DATES
1 March New Advisory Fuel Rates (AFR) for company car users apply from today.
19 March PAYE, Student loan and CIS deductions are due for the month to 5 March 2021.
31 March End of corporation tax financial year. End of CT61 quarterly period. Filing date for Company Tax Return Form CT600 for period ended 31 March 2020. Last minute planning for tax year 2020/21 – please contact us for advice.
1 April 5% late payment penalty on any 2019/20 outstanding tax which was due on 31 January 2021 and still remains unpaid.
QUOTE OF THE MONTH
'In just a few weeks, UK businesses face a dangerous precipice when the many kinds of government support that have kept them going for a year are suddenly taken away.'
Carsten Jung, Senior Economist at the Institute for Public Policy Research (IPPR), commenting on a survey carried out by the IPPR which suggests that over half a million businesses could collapse without further COVID-19 support.
IN THE NEWS
Clarity needed on taxation of COVID test costs, says ICAEW The Institute of Chartered Accountants in England and Wales (ICAEW) has urged HMRC to confirm whether COVID-19 antigen tests paid for by employers will continue to be exempt from income tax and national insurance after 5 April 2021. Click here for the full story
UK economy shrank by record 10% in 2020 The UK economy shrank by almost a tenth in 2020 as the COVID-19 pandemic adversely affected businesses, according to the latest figures from the Office for National Statistics (ONS). Click here for the full story
Borrowers of Bounce Back loans given six more months for repayments Businesses that took out government-backed Bounce Back loans to get through the COVID-19 pandemic will now have greater flexibility to repay their loans, the government has announced. Click here for the full story
HMRC's customer service levels impacted by COVID-19 Data published by HMRC has revealed that its customer service levels have been adversely affected by the COVID-19 pandemic. Click here for the full story
Vaccination programme set to boost economic recovery
The UK's COVID-19 vaccination programme will help the UK economy rebound strongly this year, according to the Bank of England (BoE).