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.
- 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.
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