The key information for you and your business

Sunak has now announced BUDGET 2021, and there were a few surprises but overall good news for business. Corporation tax increasing was a main worry for many, however this will only apply to companies with larger profits and is not immediate. The aim from the government was simple, with the core values being to protect jobs, fix our finances and build the future economy; but how will they achieve this?

So, here are the key changes for business:

  • No changes to rates of income tax, national insurance or VAT
  • Tax-free personal allowance to be frozen at £12,570 from April 2021 levels to 2026
  • Higher rate income tax threshold to be frozen at £50,270 from April 2021 levels to 2026
  • Corporation tax on company profits above £250,000 to rise from 19% to 25% in April 2023
  • Rate to be kept at 19% for about 1.5 million smaller companies with profits of less than £50,000
  • Stamp duty holiday on house purchases in England and Northern Ireland extended to 30 June
  • No tax charged on sales of less than £500,000
  • Inheritance tax thresholds, pensions life time allowances and annual capital gains tax exemptions to be frozen at 2020-2021 levels until 2025-26
  • Furlough to be extended until the end of September
  • Government to continue paying 80% of employees’ wages for hours they cannot work
  • Employers to be asked to contribute 10% in July and 20% in August and September
  • Support for the self-employed also to be extended until September
  • 600,000 more self-employed people will be eligible for help as access to grants is widened
  • £20 weekly 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
  • Minimum wage to increase to £8.91 an hour from April
  • Tax breaks for firms to “unlock” £20bn worth of business investment
  • Firms will be able “deduct” investment costs from tax bills, reducing taxable profits by 130%
  • Incentives for firms to take on apprentices to rise to £3,000 and £126m for traineeships
  • Lower VAT rate for hospitality firms to be maintained at 5% rate until September
  • Interim 12.5% rate will then apply for the following six months
  • Business rates holiday for firms in England to continue until June with 75% discount after that
  • £5bn in Restart grants for shops and other businesses in England forced to close
  • £6,000 per premises for non-essential outlets due to re-open in April and £18,000 for gyms, personal care providers and other hospitality and leisure businesses
  • New visa scheme to help start-ups and rapidly growing tech firms source talent from overseas
  • Contactless payment limit will rise to £100 later this year

And here are the other key points:

  • £1.65bn to support the UK’s vaccination rollout and £50m to boost the UK’s vaccine testing capability
  • £19m for domestic violence programmes, funding network of respite rooms for homeless women
  • £40m of new funding for victims of 1960s Thalidomide scandal and lifetime support guarantee
  • £10m to support armed forces veterans with mental health needs
  • £400m to help arts venues in England, including museums and galleries, re-open
  • £300m recovery package for professional sport and £25m for grassroots football
  • £1.2m to help stage delayed Women’s Euros football tournament in England in 2022
  • All alcohol duties to be frozen for second year running
  • No extra tax on spirits, wine, cider or beer
  • Fuel duty to be frozen for eleventh consecutive year
  • Tobacco duties to rise by inflation plus 2%

Overall, this is a positive move forward for our economy, which will rise again once COVID-19 is behind us. If you would like to learn more, or have any questions, please get in touch at info@realisefinance.com

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