The Chancellor’s 3 part plan is firstly to support business, secondly fix the public finances, and thirdly build the economy.
The support of businesses includes extension of the furlough scheme, further grants for businesses which have had to close, further business rates relief, extension of support for the self-employed, new recovery loan scheme, extension of the VAT discount for hospitality, ability to defer VAT payments, alcohol and fuel duties frozen, and extension of Statutory Sick Pay.
Yes, we knew there would be some pain in order to fix the public finances and we expected tax increases. The press headlines of a “tax grab” are somewhat sensationalist when you consider what could have been done.
There are no increases to the rates of income tax, VAT or national insurance. The allowances and basic rate thresholds do actually increase on 6th April 2021 and are then frozen until 2026.
The threatened levelling up for the self-employed hasn’t happened. There are no changes to how dividends are taxed. The much talked about hike in capital gains tax didn’t happen either.
Yes, corporation tax is due to increase from 2023 to 25%. The rate has only been below this level since 2011 and prior to that was 30% and above.
Before then we have the super deduction of 130% for investment in plant and equipment to help stimulate the economy. The extension of the SDLT holiday will continue to help the construction industry. Business will be further incentivised to take on new apprentices with an increase in the support grant to £3,000 per new apprentice.
Michael Lucas Director and Head of Tax
For further details on the Budget announcements click here or contact me or any of the team at Haleys.