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UK Budget, March 2021 Tax Highlights

The UK Chancellor unveiled today the much-awaited UK Budget for the upcoming year. When talkingReuters UK Budget 2021 about the current state of the economy, Rishi Sunak emphasised continuing to protect jobs and livelihoods, but also addressed a longer-term need to rebalance the public finances. We have highlighted some of the key points from an individual perspective:

  • There are no changes to the rates of Income Tax, National Insurance or VAT.
  • There had been speculation that Capital Gains Tax rates would increase, however, this was not the case, at least for now.
  • The Personal Allowance will increase from £12,500 to £12,570, and the starting point for the higher rate band increases from £50,001 to £50,271. There will be no further increases until 2026.
  • There is no change to Inheritance Tax thresholds, the pension lifetime allowances and the annual Capital Gains Tax exemption. There will be no further increases until 2026.
  • The furlough scheme has been extended to the end of September, although employers will be asked to contribute from July onwards.
  • For self-employed individuals, support is also extended until September and will include the “newly self-employed” who started self-employment in 2019-20 and were unable to claim previous support.
  • Stamp Duty Land Tax (SDLT) – The temporary Stamp Duty Land Tax cut on house purchases, due to end this month, has been extended to 30 June 2021.
  • The introduction of a new Mortgage Guarantee Scheme from April 2021 to support lending to people with a deposit of 5% on homes up to £600,000
In other areas, highlights include:
  • Corporate tax on company profits above £250,000 will rise from 19% to 25% in April 2023, although there will be a new small profits corporation tax rate of 19%.
  • Lower VAT rates for hospitality – 5% until September, rising to 12.5% for the following 6 months
  • A continued business rates holiday to the end of June for firms in England
  • Restart Grants for shops and other businesses that were forced to close
  • Financial aid of £1.65bn to support the UK’s vaccination rollout
  • A new visa scheme to help start-ups and rapidly growing tech firms source overseas talent

If you have any questions or would like to discuss your tax situation, contact us.

 

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