UK Budget, March 2021 Tax Highlights
The UK Chancellor unveiled today the much-awaited UK Budget for the upcoming year. When talking 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.