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Are you a subscriber to this tax service? Click here Budget 2021: Subscriber guide

Coronavirus support

  • Coronavirus Job Retention Scheme (CJRS) is extended to September 2021.
  • Self-employment income support scheme (SEISS): two further grants.
  • SEISS: newly self-employed may now qualify for these later grants.
  • Changes to the taxation of SEISS grants.
  • New Restart Grants and Additional Restrictions Grants.

See Budget 2021: COVID-19 measures

Income Tax, NICs, claims and reliefs

  • Freeze on the personal allowance and higher rate threshold at 2021-22 levels up to and including 2025-2026
  • NICs limits aligned
  • Trading loss carryback: a new three year carry back for continuing business with £2,000,000 cap.
  • Exemption from Income Tax for financial support payments to potential victims of modern slavery and human trafficking 
  • Pensions Lifetime Allowance: this is maintainws at £1,073,100 up to and including 2025-26
  • Venture Capital Schemes: Extension of the Social Investment Tax Relief (SITR) to April 2023

See Budget 2021: Income Tax, NICs, claims & reliefs

Corporation Tax

  • Corporation Tax: from April 2023 the main rate will be 25%. The 19% rate continues for profits up to £50,000, tapering to the main rate of 25% for profits over £250,000.
  • Loss carryback: extended to three years for continuing business with £2,000,000 cap.
  • Enterprise Management Incentives scheme: call for evidence.
  • R&D Relief: review & new condoc.
  • Corporation Tax: exemption for the Northern Ireland Housing Executive.
  • EU Interest and Royalties Directive: repeal.
  • Research and Development PAYE Cap: updated design.
  • Hybrid and other mismatches.
  • Review of banking surcharge.

See Budget 2021: Corporation Tax

Employers

  • Off-Payroll Working: Technical changes to the Off-Payroll Working rules legislation, including a new Targeted Anti Avoidance Rule (TAAR).
  • Traineeships: extension for 16-24-year-olds in England.
  • Statutory Sick Pay Rebate Scheme: extension 17 COVID-19: HMRC exemptions investment-led recovery.
  • COVID-19: easement for employer-provided cycles exemption.
  • Enterprise Management Incentives (EMI): Extension of time-limited exception to working time requirements.
  • Optional Remuneration Arrangements: disregard for statutory parental bereavement payments.
  • Income tax exemption for employer-reimbursed COVID-19 tests for 2020-21.
  • Easement for employer-provided cycles exemption.
  • Changes to treatment of termination payments and post-employment notice pay..
  • COVID-19 home working: extended exemption will have effect until 5 April 2022.
  • Increase the van benefit charge and the car and van fuel benefit charges.

See Budget 2021: Employers

Capital Allowances

  • 130% Super Deduction for main rate assets.
  • 50% First Year Allowance (FYA) for special rate assets for two years.
  • Annual Investment Allowance (AIA) extension.
  • Restoring plant and machinery leases to pre-Covid-19 treatment.
  • Qualifying decommissioning expenditure.
  • Freeports: 100% FYAs and Enhanced Structures & Buildings Allowance.

See Budget 2021: Capital Allowances

Capital Gains Tax

  • Maintain the Annual Exempt Amount at £12,300 up to and including 2025-26.
  • Capital Gains Tax: Relief for gifts of business assets anti-avoidance for non-residents.
  • Venture Capital Schemes: Extension of the Social Investment Tax Relief (SITR) to April 2023.

See Budget 2021: Capital Gains Tax

Inheritance Tax

  • Maintain thresholds at 2020-21 levels up to and including 2025-26.

See Budget 2021: Inheritance Tax

Land & Property taxes

Stamp Duty Land Tax (SDLT)

  • Maintain nil-rate band at £500k until 30 June 2021, £250k until 30 September 2021.
  • Non-UK Resident SDLT Surcharge 2% from 1 April 2021.
  • Relief for Freeports

Annual Tax on Enveloped Dwellings (ATED)

  • Update to annual chargeable amounts for 2021/2022 chargeable period.
  • Annual Tax on Enveloped Dwellings (ATED) and 15 per cent rate of Stamp Duty Land Tax (SDLT): Relief for Housing Co-Operatives.

Business Rates

  • Three months 100% holiday, nine months 66% relief with cap.
  • Changes to the tax-deductibility of business rate repayments.

See Budget 2021: Land & Property

VAT

  • The registration threshold will be maintained at £85,000 up to and including 2023-24.
  • The reduced rate for hospitality, accommodation and attractions will extend the 5% rate to 30 September 2021 then 12.5% to 31 March 2022.
  • The window for starting deferred payments through the VAT New Payment Scheme is extended by up to three months.
  • HMRC will have new powers to tackle Electronic Sales Suppression (ESS).
  • Changes to the Tour Operators Margin Scheme.
  • The reversal of the removal of NI Second Hand Margin Scheme for cars.
  • A repeal the VAT Treatment of Transactions Order 1992.
  • The extension of MTD for Value Added Tax to all VAT registered businesses from 1 April 2022.

See Budget 2021: VAT

Tax penalties, compliance & administration

  • Tax Conditionality: Licensing in England and Wales.
  • Self-assessment: penalty easement.
  • Interest harmonisation and tax penalty reform.
  • OECD Mandatory Disclosure Rules for Digital Platforms.
  • HMRC: investment in compliance.
  • HMRC: investment in digital infrastructure.
  • HMRC: additional resource for debt pursuit, delayed from September 2020 to April 2021.
  • Powers to amend interpretation and other provisions relating to banks.
  • Amendments to HMRC Civil Information Powers.
  • Amendment to Customs and Excise review and appeals legislation.
  • A civil penalty for the unauthorised removal of goods that have been seized ‘in situ’.
  • Tackling Promotors of Tax Avoidance: further measures.
  • Follower Notices & Penalties: further measures.

Duties & levies

  • Fuel Duty: one year freeze in 2021-22.
  • Alcohol Duty: one year freeze in 2021-22.
  • Tobacco Duty Rates: Consolidation of rates into Finance Bill 2021.
  • Gaming Duty: rates set.
  • Air Passenger Duty (APD) rates set for 2022 to 2023.
  • Red Diesel: exemptions.
  • Vehicle Excise Duty: freeze for HGVs in 2021-22.
  • HGV Road User Levy: suspend for a further 12 months from August 2021 and freeze rates.
  • Carbon Price Support (CPS) rate: maintain in 2022-23.
  • Northern Ireland Steel Import Duty.
  • Aggregates Levy: one year freeze in 2021-22.
  • Landfill Tax: rates set for 2021 to 2022.
  • Landfill Communities Fund-2021 to 2022.
  • Plastic Packaging Tax.
  • Repeal of Carbon Emissions Tax legislation.

Benefits

  • Universal Credit: maintain £20 increase to the standard allowance for six months.
  • £500 payment to eligible Working Tax Credit recipients.
  • Universal Credit: three-month delay to Minimum Income Floor reintroduction.
  • Universal Credit: maintain surplus earnings de minimis at £2,500 in 2021-22.
  • Shared Accommodation Rate (SAR): accelerate introduction of exemptions.

Misc

  • Help to Grow: management up to 90% grants.
  • Help to Grow: digital strengthening the public finances.
  • UK Emissions Trading Scheme.
  • DWP: investment in compliance with Financial Transactions.
  • Public sector net borrowing impact of changes to financial transactions and guarantees. Previously announced policy decisions Financial transactions.
  • UK-EU Future Relationship Agreement on Social Security Coordination: benefit rules.
  • Local government: exceptional financial support for Local Authorities through a capitalisation direction.
  • Withdrawal of LIBOR.

Useful guides

Budget 2021: Subscriber guide
A detailed guide with links to more detail on all the key topics for SMEs and their owners.


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