03 Mar 2021 Budget Announcement
Today the Chancellor of the Exchequer announced the Spring Budget. We have detailed the main accounting, tax and covid support measures below.
Covid Support
- Furlough extended until end of September. Government will continue to pay 80% of wages until July when employers will be asked to contribute 10% which will increase to 20% in August and September.
- Self-employment support extended until September. 600,000 more people will be eligible for this support as access to grants will be widened.
- £400m pledged to support art venues in England including museums and galleries.
- VAT rate for hospitality firms to be maintained at reduced 5% rate until September. Interim 12.5% rate will be in place for the following six months until 31st March 2022
- £5bn in ‘restart grants’ for shops and other businesses forced to close within England. £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. .
- £1.2 billion made available for Scottish Government, £740 million for the Wales and £410 million for Northern Ireland. Therefore expect more covid funding to be made available in these devolved nations soon.
Key Financial Budget Points
- No changes to inheritance tax, lifetime pension allowance or capital gains tax.
- No changes to rates of income tax, national insurance or VAT.
- Minimum wage will increase to £8.91 per hour from April.
- Personal income tax allowance will be frozen at £12,570 from 2022 to 2026.
- Higher rate income tax threshold will be frozen at £50,270 from 2022 to 2026.
- Corporate tax on company profits to rise from 19% to 25% in April 2023. Rate will remain at 19% for companies with profits less than £50,000. The rates will then taper up to companies that make £250,000 or more profit, who would pay the full 25% corporation tax rate.
- Stamp Duty Land Tax holiday extended to September, with no tax liability on sales of less than £500,000. This is currently only the case in England and Northern Ireland, however the Scottish Government is under pressure to follow suit with their Land and Buildings Transaction Tax.
- Beginning in April 2021, the new super-deduction will cut companies’ tax bill by 25p for every pound they invest in new equipment. Further information will hopefully be released about this new scheme soon.
As always, please do not hesitate to get in touch by emailing mail@dhco.co.uk for any further information.