The key points from the latest budget announced by Rishi Sunak, dominated by the battle to recover from the pandemic. The budget sets out the government's tax and spending plans for the coming year.
The Chancellor announced new measures to help business and jobs through the pandemic, to support the UK's long-term economic recovery, as well as a series of tax increases. The key points are as follows:
Tax
Corporation Tax and Business Tax
Corporation tax to increase to 25% in April 2023. However, companies with profits of £50,000 or less will still only be liable for the current 19% rate while only those with profits of £250,000 or more will pay the full 25%.
Companies will be able to offset losses against their tax bills going back up to three years, allowing them to claim additional refunds of up to £760,000
A "super-deduction" to boost business investment will mean businesses can reduce their taxable income by 130% of the amount they invest
Personal Tax
No changes to rates of income tax or national insurance
Personal allowance to be frozen at £12,570 from 2022 to 2026
Higher rate tax threshold to be frozen at £50,270 from 2022 to 2026
Stamp Duty
Stamp duty holiday extended to June, with no levy on sales of under £500,000
Capital Gains Tax and Inheritance Tax
No changes to inheritance tax or lifetime pension allowance or capital gains tax allowances
Coronavirus Support
The Coronavirus Job Retention (furlough) Scheme is set to be extended until the end of September
The government will to continue paying 80% of employees' wages for hours they cannot work, and employers will be asked to contribute 10% in July and 20% in August & September
Support for the self-employed is also set to be extended until September - 600,000 more self-employed people will be eligible for help as access to grants is widened
£20 uplift in Universal Credit worth £1,000 a year to be extended for another six months
Working Tax Credit claimants will get £500 one-off payment
Business and other key points
Incentive grants for apprenticeships to rise to £3,000 and £126 million for traineeships
VAT rate for hospitality firms to be maintained at 5% until September and an interim 12.5% rate to apply for the following six months
Business rates holiday in England to continue until June with a 75% discount after that
£5 billion in re-opening grants for non-essential businesses worth up to £6,000 per premises
Minimum wage to increase to £8.91 an hour from April
A new visa scheme to help start-ups and rapidly growing tech firms source talent from overseas
A mortgage guarantee scheme to help people with small deposits get on the housing ladder - the government will guarantee 95% mortgages to help those who can only afford a 5% deposit
Contactless payment limit will rise to £100 later this year
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Please contact us to find out how the above applies in your circumstances and how you can reduce your tax liabilities and maximise your tax efficiency.
Please note that the above is for general information only and does not constitute financial or tax advice. You should not rely on this information to make or refrain from making any decisions. You should always obtain independent professional advice in respect of your own situation.
