Post-Pandemic Outlook – A Guide to the Spring Budget by Alison Pinks, Burrowdale Accountancy
On 3rd March 2021, Chancellor Rishi Sunak unveiled details of the government’s plans to support businesses and jobs and aid the recovery of the UK economy in his Spring budget. Several coronavirus support schemes were extended, and he outlined his view of how our post-pandemic world will look in terms of taxes.
Below is a brief guide to the key points that were raised:
The personal allowance will increase from £12,500 to £12,570 from April 2021 as will the tax thresholds for higher rate tax which will increase from £50,000 to £50,270. These will then be frozen until April 2026.
National Living Wage
This will increase from £8.72 to £8.91 from April 2021 and the age you will be entitled to this will reduce from 25 to 23.
Stamp Duty Land Tax
For people in the process of buying residential property, the temporary stamp duty land tax rates will remain effective until 30th June 2021 which will mean that the nil rate band will remain at £500,000 until this date. After this, the nil band will drop to £250,000 until 30th September 2021 and then after this date it will reduce to £125,000.
Mortgage Guarantee Scheme
The government wishes to help home buyers with only 5% deposits get on the housing ladder by putting in place government backed guarantees to lenders on borrowings of 95% mortgages from April 2021 onwards.
Corporation Tax for Business
Businesses will have to pay Corporation Tax from April 2023 at varying rates: 19% on profits up to £50,000, 25% on profits over £250,000 and there will be a tapered rate for profits in between £50,000 and £250,000.
Coronavirus Job Retention Scheme
The furlough scheme will be extended until 30th September 2021 giving businesses that have had to close a much-needed lifeline during this difficult time.
Business Rates Relief
Relief of 100% will continue from 1st April to 31st June 2021 then reduce to 66% relief until 31st March 2022.
Self-Employment Income Support Scheme
There will be a further 2 grants for self-employed individuals. The 4th grant will be claimable late April 2021 and the 5th grant will be claimable late July 2021.
If you have any further questions on any points the Chancellor has raised, or any accountancy queries, we would be happy to hear from you, feel free to contact us.
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