So, for anyone who missed the Government’s Budget on 3rd March, here are some of the highlights
that might be of most interest to our readers:
- Economy forecast to rebound in 2021, with predicted annual growth of 4% this year.
- Economy forecast to return to pre-Covid levels by middle of 2022, with growth of 7.3% next year.
- Unemployment expected to peak at 6.5% next year, lower than 11.9% previously predicted.
- 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. Over time this will mean we all end up paying more tax and drag more at the lower earnings’ level into tax-paying territory.
- 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, reversing the previous trend to lower the rate in an attempt to attract more business to the UK.
- 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. The £500,000 value threshold will reduce to £250,000 from 1 July before returning to the normal £125,000 from 1 October.
- Inheritance tax thresholds, pensions life time allowances and annual capital gains tax exemptions to be frozen at 2020-2021 levels until 2025-26.
- Extending the furlough scheme to the end of September.
- The Chancellor announced details of the fourth and a new fifth payment for the self-employed income support scheme (SEISS), covering the periods February to April and May to September respectively. However, the latter benefit will be based upon how much turnover has been lost during the period.
- 95% loan-to-value mortgages to return, backed by Government guarantee
- The £20-a-week universal credit uplift will be extended for another six months
We anticipate that more tax-friendly investments and allowances will be coming under pressure over the next year or two and we encourage you to act where you can before it might be too late. If you have any queries, please contact the office.
