Budget 2021

Budget 2021 Announcements

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Here are the main provisions

Income Tax
Personal Allowances to increase to £12,570 and the basic rate threshold to £50,270
Rates and allowances will remain the same until 2026

The scheme is to be extended to 30th Sep 21 with no change to employees – Employers will have to contribute top ups of 10% in July and 20% in August and September

Corporation Tax
Main rate to increase to 25% in 2023 with a small profits rate of 19% for profits up to £50k and taper relief up to £250k
Loss relief to be carried back 3 years

Grants 4 and 5 announced covering Feb-Apr 21 of 80% of average profits; 5- May to Jul. Self Employed individuals who have filed a return by midnight of 2nd March will eligible for the grants

5% reduced rate for the hospitality sector to continue until 30th Jun then a staged return to the full rate in April 2022 by increasing the rate to 12.5% for the period 01/10/2021 to 31/03/2022
Registration limit of £85k to remain unchanged until 2024

£500k nil rate band to continue until 30th June then £250k to 30th September returning to the original £125k on 1st October

Capital allowances for investments in innovation up to £10m will be given relief of 130%
www.gov.uk/helptogrow register for productivity grants
Green Gilts / Bonds – new products to be available in the summer

Capital Gains
Annual allowances remain unchanged until 2025/26 – no mention of a rate hike!

National Living Wage
This is to rise to £8.91 in April
£3k grants for new apprenticeship

Business Rates Holiday
Extended to the end of June

Restart Grants
Non-essential retail to receive grants of up to £6,000 and up to £18,000

Budget predictions

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Likely provisions on today’s budget:

Covid relief measures – Job retention scheme to be extended until September with increased employer contributions from July onward.

CGT – Looks like the rates will be gradually increased to match income tax. This is an obvious choice for the Chancellor.

Income tax personal allowances currently £12,500 and the income tax thresholds to be frozen

The main rate of Corporation Tax to rise to 23% or possibly the a split between the main rate and the small companies rate depending on profits.

Abolishment of higher rate income tax relief on pension contributions limiting relief to 20%.

Extension of the reduced rate of VAT for the hospitality sector.

Stamp Duty – perhaps an extension to the SDLT holiday for properties up to £600k.