March 2021 Budget
So far, the UK Government has spent £407 billion on COVID-19 related economic support. Despite this, the Chancellor announced that the Furlough scheme will be extended until September as well as further grants for the self-employed.
The Business rate holiday for companies who have been forced to close due to COVID restrictions has also been extended until the end of June, with the remaining months of the year discounted by up to 2/3rds.
Other Key Announcements:
The Stamp Duty Holiday for purchases of houses valued at up to £500,000 has been extended until June. From July until September this will reduce to £250,000 and will revert to the pre-COVID usual exempt rate of £125,000 from 1st October 2021.
There is also a Government backed “Mortgage Guarantee” for buyers with a 5% deposit for homes purchased with a value up to £600,000.
There were no increases to Income Tax rates, VAT & National Insurance Contributions.
The tax-free Personal Allowance will increase to £12,570 & the Basic Rate threshold will increase to £50,270 from April 2021. These figures will remain in place until at least April 2026.
The Inheritance Tax threshold, Capital Gains Tax Annual Exempt Amount, the Pension Annual Allowance & Pension Lifetime Allowance have all been frozen at their respective rates until April 2026.
The rate of Corporation Tax will increase to 25% by April 2023. However, smaller profits of £50,000 or less will remain taxable at the existing rate of 19%. There will be a tapering of the rate of tax for profits between £50,000 & £250,000, and companies with profits above £250,000 will be subject to the new 25% rate.
To offset the Corporation Tax increase, the Chancellor announced an increase in loss relief, whereby losses of up to £2 million can now be carried back for up to 3 years. There is also a 2-year tax “super-deduction” of 130% for eligible business expenditure on Plant & Machinery.
There was also an announcement of 8 new Freeports. The Freeports will benefit from favourable tax treatment as well as other incentives to stimulate investment and create jobs in these areas.