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The Budget 2021

The Chancellor Rishi Sunak presented his second Budget on Wednesday 3 March 2021. In his speech he stated his Budget ‘meets the moment with a three-part plan to protect the jobs and livelihoods of the British people’.

Some Budget proposals may be subject to amendment in the 2021 Finance Act.
You should contact us before taking any action as a result of the contents of this summary.

Tax measures include

a super-deduction for companies investing in new plant and machinery

a time extension of the temporary increase to the SDLT nil rate band for residential property in England and Northern Ireland

an extension to the temporary 5% reduced rate of VAT for certain supplies

a temporary increase in the carry-back period for business losses

an increased rate of corporation tax from 2023

Previously announced measures include

a cap on the amount of R&D tax credit paid to a loss-making small or medium-sized enterprise

new rules apply to off-payroll working payments made for services provided on or after 6 April 2021

Other measures include

a new mortgage guarantee scheme

extension to the Job Retention Scheme

a Self-Employment Income Support Scheme fourth and fifth grant

an extension to the business rates holiday in England

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Personal Tax

The personal allowance is currently £12,500. Budget 2018 announced that the allowance would remain at the same level until 2020/21 and the statutory provision to increase the allowance annually by CPI was to be overridden. The Chancellor has confirmed that the personal allowance will increase by CPI (0.5%) for 2021/22 to £12,570.

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Employment

The current JRS allows an employer to place an employee on furlough and apply for a grant to cover wage costs for the time an employee is on furlough.

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Business

In 2020, the government introduced a number of government-guaranteed coronavirus loan schemes. In December 2020 the Chancellor extended, until the end of March 2021, access to the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme and the Coronavirus Large Business Interruption Loan Scheme.

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Capital Taxes

No changes to the current rates of CGT have been announced at Budget 2021. This means that the rate remains at 10%, to the extent that any income tax basic rate band is available, and 20% thereafter. Higher rates of 18% and 28% apply for certain gains; mainly chargeable gains on residential properties with the exception of any element that qualifies for Private Residence Relief.

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Other Matters

Land and buildings transaction taxes are devolved to Scotland (Land and Buildings Transaction Tax) and Wales (Land Transaction Tax). Stamp Duty Land Tax (SDLT) applies to transactions in England and Northern Ireland. All these taxes have had a temporary increase in the nil rate threshold for residential properties. The thresholds were set to return to the previous thresholds from 1 April 2021.

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Rates and Allowances

Understand everything you need to know about the new government rates and allowances for taxes, pensions, insurance and many more, broken down into readable chunks.

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