Budget 2021 Update

It’s an introduction only and should not be used as a definitive guide, since individual circumstances may vary. Specific advice should be obtained, where necessary. The message from the Chancellor was that this is a Budget with three aims: protecting the jobs and livelihoods of the British people strengthening the public finances supporting an investment-led recovery You can read the individual measures and details of some of the numerous consultations below. Rates and allowances   2021/22 2020/2021   £ £ Income tax rates (non-dividend income) 0% lower rate tax – savings rate only Up to 5,000 Up to 5,000 20% basic rate tax 12,571 to 50,270 12,501 to 50,000 40% higher rate tax 50,271 to 150,000 50,001 to 150,000 45% additional rate tax Above 150,000 Above 150,000 Scottish income tax rates (non-dividend income) 19% starting rate tax 12,571 to 14,667 12,501 to 14,585 20% basic rate tax 14,668 to 25,296 14,586 to 25,158 21% intermediate rate tax 25,297 to 43,662 25,159 to 43,430 41% higher rate tax 43,663 to 150,000 43,431 to 150,000 46% top rate Above 150,000 Above 150,000 Personal allowance Personal allowance 12,570 12,500   Capital gains tax annual exempt amount (after personal allowance) These are frozen at £12,300 for individuals and £6,150 for trusts. Dividend allowance The tax-free dividend allowance is unchanged at £2,000. Corporation tax The corporation tax rate will remain at 19% but from April 2023 the applicable corporation tax rates will be 19% and 25%. Businesses with profits of £50,000 or below will still only have to pay 19% under the small profits rate. Grants – restart ‘Restart Grants’ are available in England of up to £6,000 per premises for non-essential retail businesses and up to £18,000 per premises for hospitality, accommodation, leisure, personal care and gym businesses Grants – export The SME Brexit Support Fund grant provides up to £2,000 to help with training or professional advice. Enhanced capital allowances: super deduction This introduces increased reliefs for expenditure on plant and machinery. For qualifying expenditures incurred from 1 April 2021 up to and including 31 March 2023, companies can claim in the period of investment: a super-deduction providing allowances of 130% on most new plant and machinery investments that ordinarily qualify for 18% main-rate writing-down allowances a first-year allowance of 50% on most new plant and machinery investments that ordinarily qualify for 6% special rate writing down allowances Annual investment allowance (AIA) Companies will be able to claim £1m as AIA for expenditure incurred from 1 January 2019 to 31 December 2021. The announcement was made in November and before the ‘super deduction’. Apprenticeship funding Apprenticeship incentive payments for employers will increase to £3,000 per new hire until September 2021. Making tax digital (MTD) There were no announcements on MTD except that the government will publish an evaluation on the introduction of MTD for VAT, expected on 23 March. VAT   2021/22 2020/21   £ £ VAT Standard rate 20% 20% Registration threshold 85,000 85,000 Deregistration threshold 83,000 83,000  The VAT registration and deregistration thresholds will not change for a further period of two years from 1 April 2022. The reduced rate of VAT of 5% to the hospitality, holiday accommodation and attractions sector is extended until 30 September 2021. After this date, the VAT rate will be 12.5% to the end...

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