We’d like to give you a short summary of the budget highlight key areas of interest. For more in-depth analysis of the Spring budget full and guidance from out tax expert Wendy McBride visit our Spring 2021 Budget Update
- The main rate of corporation tax will be increased to 25% from April 2023 for companies with profits of at least £250,000. At the same time, a new small companies’ rate of 19% will apply to companies with profits of up to £50,000.
- For the two years from April 2021, companies investing in qualifying new plant and machinery will benefit from a 130% first-year capital allowance.
- The personal allowance in England, Wales and NI will rise to £12,570 and the higher rate threshold will be £50,270 for 2021/22 and both will then be frozen for the next four years.
- The capital gains tax annual exemption, inheritance tax rate nil rate bands and pensions lifetime allowance will all be frozen at their current levels until April 2026.
- The exemption from stamp duty land tax in England and NI on the first £500,000 of residential property value will be extended to 30 June 2021 and then replaced by a £250,000 exemption until 30 September 2021. We are waiting to hear if these changes will be replicated in Scotland and Wales.
- See our Tax Rate Card 2021/22 for a summary of the property transaction taxes and stamp duties for Scotland (LBTT), England & NI (SDLT) and Wales (LTT).
- The coronavirus job retention scheme will be extended in full until 30 June 2021 and will be phased out over the following three months.
- The self-employed income support scheme will also be extended at its current level with a fourth grant covering the period February to April. A fifth grant will cover the period May to September, but this will be at a lower level for those who have seen less than a 30% drop in turnover.
- The business rates holiday for retail, hospitality and leisure businesses will be extended for three months and will then be reduced to a 66% relief until the end of March 2022. We expect an announcement from the Scottish Government shortly on whether the business rates holiday and subsequent 66% relief will also be available to Scottish businesses.