Budget Special (or ‘we all love Rishi’)
Well, I didn’t envy Rishi Sunak’s job yesterday and I suppose all in all the budget wasn’t the tax ‘apocalypse’ some were predicting. The devil, though is often in the detail and I will be looking at that over the next few days. We have a Budget summary for you which can be downloaded HERE.
Edited highlights are as follows:
Measures to mitigate the impact of Coronavirus
· Extension of ‘furlough payments’ to September 2021.
· Fourth and fifth Self Employment Income Support Scheme grants announced.
· No support announced for people working as directors of own company.
· Range of ‘Restart’ grants for businesses reopening after lockdown.
· Recovery Loan Scheme from 6 April 2021.
· Business rates holiday for eligible retail, hospitality and leisure premises continues.
· 5% reduced rate of VAT for hospitality and leisure industry extended.
Reliefs extended
· Nil rate of SDLT on property transactions up to £500,000 extended to 30 June 2021, with £250,000 threshold up to 30 September 2021.
· Duties on alcoholic drinks and fuel frozen.
Tax year 2021/22
· Small increases in main Personal Allowance, Basic Rate Band and NIC thresholds.
· Lifetime Allowance for pension funds, IHT nil rate band, CGT annual exempt amount, ISA subscription limits all frozen at 2020/21 levels
· No increase in CGT rates announced, contrary to some speculation in advance
· Corporation Tax rate remains 19% until 31 March 2023
· New ‘super-deduction’ for investment by companies: 130% of qualifying expenditure on general plant for two years from 1 April 2021 (cars are excluded).
· Trading losses (up to £2 million) for companies and self-employed businesses to be carried back up to 3 years instead of the usual 12 months.
· Cap on Research and Development claims: payable tax credit not to exceed £20,000 plus three times PAYE & NIC liability.
Tax measures coming into effect later
· Personal allowances and income tax rate thresholds frozen at 2021/22 levels until the end of 2025/26.
· Lifetime Allowance for tax-advantaged pension funds, Inheritance Tax nil rate band and Capital Gains Tax annual exempt amount all frozen at their current levels until the end of 2025/26.
· VAT registration threshold fixed at current level of £85,000 until 31 March 2024.
· Corporation tax rate on profits over £250,000 to increase to 25% from 1 April 2023, with the current 19% rate applying to profits below £50,000 and a tapering calculation on profits between £50,000 and £250,000.
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