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Budget 2021: Chancellor Announces Tax & Spending Plans

Chancellor Rishi Sunak has announced measures to support businesses and households, as well as how ongoing support will be financed.

 

Furlough Scheme

  • Extended until end of September at the 80% rate.
  • Employers to contribute 10% in July, 20% in August and September.

Self Employed Income Support Scheme (SEISS)

  • Extended until end of September.
  • 1st February to 30th April 2021 will be at 80% of the 3-month average profits and can be claimed from late April.
  • 1st May to 30th September 2021 will be at a reduced rate depending on the reduction in profits of the business and can be claimed from late September.

Business Rates

  • Business rates holidays for retail, hospitality and leisure will continue to the end of June.
  • Discounted up to 67% for the remainder of the year.

Recovery Loan Scheme

  • Loans from £250,000 to £10,000,000 that will be 80% guaranteed by the Government.

Super-Deduction Allowance

  • A super-deduction allowance for businesses investing in new plant and machinery from 1st April 2021 to 31st March 2023, giving a deduction of 130% against profits in the year of acquisition or 50% on special rate assets.

Hospitality Sector

  • The reduced VAT rate of 5% will continue until 30th September 2021.
  • 1st October 2021 to 31st March 2022 it will increase to 12.5%.
  • From 1st April 2022 it will return to the full 20% rate.

Construction Sector

  • Stamp Duty Land Tax £500,000 nil rate band for residential properties has been extended to 30th June 2021.
  • 1st July to 30th September 2021 it will be reduced to £250,000.
  • From 1st October 2021 it will return to the standard band of £125,000.

 

The Universal Credit £20 weekly uplift has been extended for six months.

Stamp Duty Holiday on house purchases in England and Northern Ireland extended to 30 June.

 

The plan to raise taxes to protect the Exchequer from these additional costs includes:

  • No changes to rates of Income Tax, National Insurance or VAT.

 

  • Tax-free personal allowance to be frozen at £12,570 from 6th April 2021 to 5th April 2026.
  • Higher rate income tax threshold to be frozen at £50,270 from 6th April 2021 to 5th April 2026.
  • Inheritance Tax thresholds, Pensions Lifetime Allowances and annual Capital Gains Tax exemptions to be frozen at 2020-21 levels until 5th April 2026.

 

  • Corporation Tax rate increase to 25% from 1st April 2023 for companies with profits over £250,000. For companies with profits up to £50,000 the rate will continue at 19%. There will be a tapered rate between these two profit levels.

 

MATCH is working hard to keep on top of all the latest news and government support so, as always, feel free to get in touch if you have any queries and we’ll be happy to help.

 

MATCH Accounting Limited