2021 Spring Budget Statement Summary
The structure of this Budget, like its predecessor, was driven mainly by the pandemic’s impact on the economy. With some form of lockdown continuing over the next few months, Mr Sunak extended the main employment support schemes through to 30th September 2021 and added further grants and loans to assist struggling businesses.
The total cost of his pandemic measures in this tax year and the next are now projected to be greater than the amount that will be raised in income tax over the same period. How the government can claw back that expenditure, while rebuilding the economy, formed the focus of the Chancellor’s speech.
Some of the other highlights of the Budget statement were:
The main rate of corporation tax will be increased from the present level of 19% to 25% from April 2023 for those companies with profits of at least £250,000. The present rate of corporation tax will however continue to apply for companies with profits of up to £50,000. This will be defined as the Small Companies Rate.
- For the two years from April 2021, companies investing in qualifying new plant and machinery will benefit from a 130% first-year super-deduction.
- 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 30th June 2021 and then replaced by a £250,000 value exemption until 30th September 2021.
We hope you find the issue of this Budget summary to be useful. If you have any questions about the attached summary’s contents, or indeed have any queries about how any aspects of your own personal tax or financial planning may be affected by the Budget, then please do not hesitate to call us. We would be pleased to hear from you.
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