Spring Budget 2021 highlights

From extending furlough until September to raising corporation tax in 2023, we provide an overview of the Spring Budget 2021.

Corporate and Commercial

Corporation tax will increase from 19% to 25% in April 2023 for larger businesses.
The 19% corporation tax rate will remain for firms with profits under £50,000.
A tax relief will be introduced to encourage business investment, so when companies invest, they can lower their tax bill by 130% of the cost of the investment.
Income tax thresholds will not change until 2026.
The new UK Infrastructure Bank will be provided with £10bn of government guarantees and £12bn of capital to help encourage investment. Nearly £400m will be invested alongside the private sector in high-growth start-up businesses.
Businesses will be able to avail of a new “Recovery loan scheme” to replace the Bounce Back and coronavirus loan schemes.
A new £5bn Restart Grant scheme will be launched to provide firms affected by the pandemic with up to £18,000.
Hospitality and leisure businesses pay no business rates for three months, then rates will be discounted for the following 9 months of the year by two-thirds.
Business rates relief for retail and hospitality has been extended for 3 months. After which, business rates will be discounted by two-thirds for the remaining 9 months.
Hospitality and tourism firms will benefit from VAT being held at 5%.
The contactless payment limit will also rise to £100.

Employment

The furlough scheme will continue until the end of September 2021. Until then furloughed employees will receive 80 per cent of their salary but businesses will be asked to contribute from the end of July as economic recovery speeds up.
Self-employed workers will be able receive a fourth grant from the Self-Employed Income Support Scheme (SEISS) worth 80% of three months’ trading profits up to £7,500. Those who became self employed in the 2019-20 financial year will now also be able to receive the payments. A fifth grant will also be made available.
There will be additional funding for apprenticeships with a financial incentive for employers to hire apprentices boosted to £3,000 per person.

For further information on the impacts of the Spring Budget in employment, see the additional summary here.

Residential Property

Stamp Duty Land Tax (‘SDLT’) holiday which temporarily increased the SDLT nil-rate band threshold to £500,000 has been extended for three months beyond the originally intended deadline of 31 March 2021 to 30 June 2021. This means that buyers now have an additional window in which they can make a saving. After the new deadline of 30 June 2021, the threshold will reduce from £500,000 to £250,000 until 30 September 2021.
A mortgage guarantee scheme for lenders will be introduced by the Government to help homebuyers purchase a property with small deposits.

For further information on the impacts of the Spring in property, see the additional summary here.

Commercial Property

Hospitality and leisure businesses pay no business rates for three months, then rates will be discounted for the following 9 months of the year by two-thirds.
Business rates relief for retail and hospitality has been extended for 3 months. After which, business rates will be discounted by two-thirds for the remaining 9 months.
£1bn has been announced for new town redevelopment deals.
Eight new free ports will be created across in the country including the Thames.

For further information on the impacts of the Spring in property, see the additional summary here.

Environment

The Bank of England will be given a new policy remit with green goals to help address climate change.
A new green savings bond will be aimed at retail investors to help raise the money required to make the transition to zero carbon emissions.

Private client

Inheritance tax, which is currently chargeable at a rate of 40% on assets exceeding the nil rate band of £325,000, will remain the same.

Family

For additional information on the Spring budget from our family team, click here.

Related Team Specialists