7
Budget 2021
Temporary changes to legislation resulting from coronavirus Easement for employer-provided cycles exemption
The government will legislate in Finance Bill 2021 to introduce a time-limited easement to the employer-provided cycle exemption to disapply the condition which states that employer-provided cycles must be used mainly for journeys to, from, or during work. The easement will be available to employees who have joined a scheme and have been provided with a cycle or cycling equipment on or before 20 December 2020.
The change will have effect on and after Royal Assent of Finance Bill 2021 and be in place until 5 April 2022, after which the normal rules of the exemption will apply.
Employer-reimbursed coronavirus tests
The government will legislate in Finance Bill 2021 to introduce a retrospective income tax exemption for payments that an employer makes to an employee to reimburse for the cost of a relevant coronavirus antigen test for the tax year 2020/21. Legislation will extend this exemption for the tax year 2021/22.
The change will have effect on and after Royal Assent of Finance Bill 2021. The corresponding NICs disregard is already in force and this will also be extended for the tax year 2021/22.
Extension of income tax exemption for COVID-19 related home office expenses
The government will, by secondary legislation, extend the temporary income tax exemption and Class 1 NICs disregard for employer reimbursed expenses that cover the cost of relevant home office equipment. The extended exemption will have effect until 5 April 2022.
National Insurance 2021/22 Class 1 (employed) rates Employee
Employer
%
%
Earnings per week
Earnings per week
Up to £184
0
Up to £170
0
£184.01 - £967
12
Over £170
13.8
Over £967
2
Entitlement to contribution-based benefits for employees retained for earnings between £120 and £184 per week. The employer rate is 0% for employees under 21 and apprentices under 25 on earnings up to £967 per week.
On employee taxable benefits
13.8%
Class 1A (employers) Class 1B (employers) Class 2 (self-employed)
On PAYE Settlement Agreements
13.8%
Flat rate per week
£3.05
Small profits threshold
£6,515 per annum
Flat rate per week
£15.40
Class 3 (voluntary)
On profits between £9,568 - £50,270
9%
Class 4 (self-employed)
Excess over £50,270
2%
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