03/03/2021
Budget 2021 headlines
Further to the chancellors budget announcement here are the headlines which may impact your financial planning:
• Income tax: 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.
• Pensions: Lifetime allowance for pensions frozen at £1,073,100 until April 2026. No changes to annual allowance, money purchase annual allowance or tapered annual allowance figures or rules.
• Capital gains tax annual exempt amount frozen at £12,300 until April 2026. No change to the tax rates for CGT.
• 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).
• ISA subscription limit remains at £20,000 in 2021/22 and the Junior ISA and Child Trust Fund subscription limits remain at £9,000.
• 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.
• Fuel duty and alcohol duties are frozen.
• Coronavirus Job Support Scheme extended to September 2021 across the UK (employer contribution of 10% required in July and 20% in August and September).
• Self Employment Income Support Scheme (SEISS) extended to September 2021 across UK, with those who filed a tax return in 2019/20 now being able to claim for the first time.
• Stamp Duty Land Tax (SDLT) temporary cut in England and Northern Ireland extended until September 2021. The £500,000 nil rate band will be extended until 30 June 2021 then it will be set at £250,000 until 30 September 2021 returning to its standard level of £125,000 on 1 October 2021.
• New mortgage guarantee scheme to enable all UK homebuyers to secure a 95% mortgage on properties up to £600,000 – only a 5% deposit needed.