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[04.03.2021]

Budget 2021 – Key Points

On Wednesday 3rd March 2021 the Chancellor for the Exchequer, Rishi Sunak, presented the government’s 2021 budget. The budget set out the tax and spending plans for the year ahead and also included support for the financial burdens the Coronavirus pandemic has caused.

Here we will highlight some of the key points which came from the recent budget:

Coronavirus support

  • Furlough to be extended until the end of September 2021
  • Employers to contribute 10% in July and 20% in August and September to furlough payments
  • Support for the self-employed to be extended until September
  • Access to self-employed grants to be widened, making 600,000 more people eligible
  • £1.65bn to support the UK’s vaccination rollout

 

State of the economy and public finances

  • UK economy shrank by 10% in 2020
  • Economy forecast to return to pre-Covid levels by middle of 2022, with growth of 7.3% next year
  • Unemployment expected to peak at 6.5% next year, lower than 11.9% previously predicted

Taxation

  • No changes to rates of income tax, national insurance or VAT
  • Personal income tax allowance to be frozen at £12,570 from April 2022 to 2026
  • Higher rate income tax threshold to be frozen at £50,270 from 2022 to 2026
  • Corporation tax on company profits to rise from 19% to 25% in April 2023
  • Rate to be kept at 19% for about 1.5 million smaller companies with profits of less than £50,000
  • Stamp duty holiday on house purchases in England and Northern Ireland extended to June, with no tax liability on sales of less than £500,000
  • No changes to inheritance tax or lifetime pension allowance
  • No changes to capital gains tax allowances

Business, digital and science

  • Tax breaks for firms to “unlock” £20bn worth of business investment
  • Firms will be able “deduct” investment costs from tax bills, reducing taxable profits by 130%
  • VAT rate for hospitality firms to be maintained at reduced 5% rate until September, then an interim 12.5% rate to apply for the following six months
  • Business rates holiday for firms in England to continue until June with 75% discount after that
  • £5bn in Restart grants for shops and other businesses forced to close
  • £6,000 per premises for non-essential outlets due to re-open in April and £18,000 for gyms, personal care providers and other hospitality and leisure businesses

Follow our Social Media pages over the next few weeks as we will go into more detail on some of the points to come from the budget. If you are concerned as to how any of the above may affect you please contact us and we will be able to look into this and advise you further.

Ian Lowry

 

 

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