This is one of the more important budgets of recent times. So, what was announced?
Income tax rates, thresholds, and thresholds
- For 2021/22 Personal Allowance increasing to £12,570, basic rate band to £37,700 meaning a higher rate threshold of £50,270 – but then these figures will be frozen until April 2026.
- No changes to dividend allowance, personal savings allowance, starting rate band for savings.
Capital gains Tax
- No other changes made apart from the exempt amount of gains you can make being frozen rather than increasing in line with inflation.
Pensions
- No changes other than that the limit on the level of pension benefits you can take, the Lifetime Allowance, is to be frozen rather than increasing in line with inflation.
Inheritance Tax
- Inheritance nil rate band frozen at £325,000 and residence nil rate band at £175,000 until April 2026 (and the residence nil rate band taper threshold remains at £2 million until April 2026).
Corporation tax
- Corporation tax: In 2023 the main corporation tax rate will increase to 25% but for companies with profits of no more than £50,000 the rate will remain at 19%.
- There will be a tapering of the rate for companies with profits over £50,000 but less than £250,000 so only companies with profits above £250,000 will suffer the full 25% rate.
- A new super deduction will be available to reduce tax bill 130% of the cost of any investments in the business.
Other announcements
- The Job Retention Scheme – or furlough – will be extended until the end of September.
- High Streets shops and hospitality firms will be able to get a grant from a £5bn fund to help them reopen after lockdown.
- An extra £300m will be added to the government’s £1.57bn Culture Recovery Fund.
- Business rates holiday extended to June.
- The 5% reduced rate of VAT on hospitality and tourism will be extended for six months to 30 September.
- the up-to-£500,000 “nil-rate band” for stamp duty will finish at the end of June with a tapered extension to the end of September, rather than the end of March, as planned.
- First-time buyers will get a “government guarantee” on mortgages, with a deposit of 5%.
- Alcohol and fuel duties to be frozen.
- Liverpool gets a Freeport alongside 7 other locations.
