We have pleasure in attaching our summary of the key announcements in the 2021 Budget.
The structure of this Budget, like its predecessor, was driven by the pandemic’s impact on the economy. With lockdown continuing over the next few months, Mr Sunak extended the main employment support schemes through to 30 September and added further grants and loans to assist struggling businesses.
The highlights include:
- 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 allowance.
- The personal allowance 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 tax 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 on the first £500,000 of residential property value will be extended to 30 June 2021 and then replaced by a £250,000 value exemption until 30 September 2021.
- The coronavirus job retention scheme will be extended in full until 30 June 2021 and then phased out to 30 September 2021.
- The self-employed income support scheme will also be extended for a fourth and fifth grant. Some further restrictions will apply but individuals who became self-employed during 2019/20 will be able to apply.
- 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 trust that you find the enclosed Budget Summary useful and that it is a helpful basis for a discussion with us about your financial future.