Spring 2021 Budget highlights

 

 

BUDGET ROUNDUP

THE SUPPORT PACKAGES WE ARE NOW FAMILIAR WITH:

  • The Chancellor confirms the extension of the furlough scheme until the end of September.
  • Employees will continue to receive 80% of their wages until the scheme ends, but firms will be asked to contribute 10% in July and 20% in August and September as the scheme is gradually phased out.
  • Sunak also confirms the self-employment income support scheme has also been extended. The fourth grant will cover February to April, worth 80% of average trading profits up to £7,500.
  • The £20-a-week increase in universal credit is extended for six months.

 

THE BOUNCE BACK SCHEME:

  • As the government-backed bounce back loan (BBL) and coronavirus business interruption loan scheme (CBILS) come to an end, the Treasury is launching a new loan scheme to run until the end of the year. Loans can be between £25,000 and £10m.

 

RATES:

  • Hospitality and leisure businesses pay no business rates for three months, then rates will be discounted for the remaining nine months of the year by two-thirds, in a £6bn tax cut.
  • 5% reduced rate of VAT will be extended until the end of September. Then it will be gradually increased, at 12.5% for six months, before returning to the standard rate from April 2022. Sunak says this is a cut worth £5bn.

 

HOUSING:

  • The Chancellor announces the stamp duty holiday will be extended. As expected, stamp duty holiday on properties up to £500,000 continues until the end of June. It will be kept at double its standard level until the end of September, and then return to usual levels from 1 October.
  • The chancellor confirms a mortgage guarantee to help first-time buyers access 95% mortgages.

 

TAXES – personal:

  • The government will not raise national insurance, income tax or VAT, but will freeze personal tax thresholds – as anticipated.
  • The personal allowance will remain at £12,750 until 2026. The higher-rate threshold will increase to £50,270 next year, and also remain at that level.
  • The inheritance tax threshold, pensions lifetime allowance, annual exempt allowance from capital gains tax and VAT exemption threshold will also be frozen.

 

 

TAXES – corporate:

  • In April 2023, the rate of corporation tax will increase to 25%. Sunak says this will be the lowest rate in the G7.
  • Sunak says businesses will only be impacted if they are making profits, and the change will only come in once the OBR forecasts the economy will be recovering.
  • The rate will be tapered so that only businesses with profits of more than £250,000 will be taxed at the full 25% rate; that means only 10% of companies will pay the full higher rate. Companies with profits of less than £50,000 will remain at 19%.

 

THE IMPORTANT BITS!

  • Alcohol duties will be frozen for the second year in a row.
  • Fuel duty will also be frozen.

Hope this has helped clarify some of the points covered in the budget today.

 

If you would like to talk to us about anything to do with your business, please get in touch, even if you are not a client. We won’t charge for a phone call or to respond to an email! 01763 257882 or david@theaccountancypractice.com

 

Spring Budget 2023 – Overview and comment

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