The Chancellor Rishi Sunak delivered his second Budget on Wednesday 3 March. As well as new and extended measures related to the impact of coronavirus, the Chancellor outlined his plans to rebalance public finances and support rapid economic recovery, with a range of proposals designed to address the budget deficit and kickstart growth in the post-lockdown period.
Coronavirus Economic Assistance Measures – Furlough extension to September 2021, Employer contributions from July 2021. Self Employment Income Support Scheme extension to cover periods February-April and May-September 2021, with new eligibility conditions. Universal Credit £20 weekly uplift extended to September 2021 and £500 one-off payment to those claiming Working Tax Credit. Recovery Loan Scheme for business loans – government guarantees of 80% of eligible loans between £25K and £10M
Income Tax and National Insurance Contributions – no change to Income Tax rates. Small increases from 6 April 2021 to Personal Allowance (£12,570), Higher rate 40% starting point (£50,270) and NIC upper threshold (£50,270) – all then frozen until 5 April 2026
Value Added Tax – 5% reduced rate for hospitality and leisure sector extended to 30 September 2021, followed by a 12.5% reduced rate period to 31 March 2022
SDLT – 0% rate on residential property transactions up to £500K extended to 30 June 2021; followed by 0% rate on transactions up to £250K to 30 September 2021
Corporation Tax – 19% rate until 31 March 2023; then remaining at Small Profits Rate 19% for companies with profits up to £50K, a tapering of the rate for companies with profits between £50K and £250K; and a main rate of 25% for companies with profits over £250K
Capital Allowances for Companies – Super-deduction for investment by companies – 130% allowance for qualifying expenditure on plant and machinery for 2 years from 1 April 2021 to 31 March 2023; and First Year Allowance of 50% for special-rate assets
Annual Investment Allowance - Limit of £1M extended until 31 December 2021
Tax Relief for Trading Losses of Businesses – for losses of up to £2M per annum incurred in the 2 year period ending 31 March 2022 (companies) and 2 tax years 2020/21, 2021/22 (unincorporated businesses): potential to carry back these losses for 3 years
Capital Gains Tax – no change to rates/bands, Annual Exemption frozen at £12,300 until 5 April 2026
Inheritance Tax rates/bands – frozen at current levels until 5 April 2026
Value Added Tax – registration threshold £85,000 frozen until 31 March 2024
As many of the announcements are subject to legislation, the details may change during the legislative process and so should be kept under review. We look forward to hearing from you to discuss any of the budget announcements and implications for you or your business.
Belfast - Lyn Canning Hagan
Lisburn - Christine Harrison
Portadown - Neil Armstrong