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The Budget 3 March 2021

The Chancellor, Rishi Sunak, today delivered his second Budget, and were there any real surprises in there?

Much had been made in the press about a possible increase in Corporation Tax and even Capital Gains Tax but with the effects of COVID 19 on the economy and government support for business continuing well into 2021, how would this balance out.

Whilst the Corporation Tax rise did come to fruition, it was perhaps more what he didn’t do in terms of freezing the tax-free personal allowance, higher rate tax bands (Scottish government does of course set it’s own rates here), Inheritance Tax nil rate band and residence nil rate band, Capital Gains Tax annual exemption, and pensions lifetime allowance frozen until April 2026 which will affect most; back to the days of fiscal drag/stealth tax!

A snapshot of the upcoming changes are set down in the following extract from those published on the Treasury’s website:

Personal tax

Inheritance tax nil-rate band and residence nil-rate band – The inheritance tax nil-rate bands will remain at existing levels until April 2026. The nil-rate band will continue at £325,000, the residence nil-rate band will continue at £175,000, and the residence nil-rate band taper will continue to start at £2 million. Qualifying estates can continue to pass on up to £500,000 and the qualifying estate of a surviving spouse or civil partner can continue to pass on up to £1 million without an inheritance tax liability.

Personal Allowance and higher rate threshold (HRT) – The income tax Personal Allowance will rise with CPI as planned to £12,570 from April 2021 and will remain at this level until April 2026. The income tax HRT will rise as planned to £50,270 from April 2021 and will remain at this level until April 2026. The Personal Allowance applies across the UK. The HRT for savings and dividend income will also apply UK-wide. The HRT for non-savings and nondividend income will apply to taxpayers in England, Wales, and Northern Ireland.

National Insurance contributions (NICs) thresholds – As previously announced, and legislated for in February 2021, in 2021-22 NICs thresholds will rise with CPI, bringing the NICs Primary Threshold/Lower Profits Limit to £9,568 and the Upper Earnings Limit (UEL)/Upper Profits Limit (UPL) to £50,270, in line with the income tax HRT. The UEL/UPL will then remain aligned with the HRT at £50,270 until April 2026. All other NICs thresholds will be considered and set at future fiscal events. NICs thresholds apply across the UK.

Capital Gains Tax Annual Exempt Amount (AEA) uprating – The value of gains that a taxpayer can realise before paying Capital Gains Tax, the AEA, will be maintained at the present level until April 2026. It will remain at £12,300 for individuals, personal representatives and some types of trusts and £6,150 for most trusts.

Pensions and savings tax

Pensions Lifetime Allowance – The government will maintain the Lifetime Allowance at its current level of £1,073,100 until April 2026.

Corporate tax

Corporation tax – To balance the need to raise revenue with the objective of having an internationally competitive tax system, the rate of corporation tax will increase from April 2023 to 25% on profits over £250,000. The rate for small profits under £50,000 will remain at 19% and there will be relief for businesses with profits under £250,000 so that they pay less than the main rate. In line with the increase in the main rate, the Diverted Profits Tax rate will rise to 31% from April 2023 so that it remains an effective deterrent against diverting profits out of the UK.

VAT

VAT threshold – The VAT registration and deregistration thresholds will not change for a further period of two years from 1 April 2022, giving businesses certainty.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/966161/Budget_2021_Web_accessible.pdf

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Whilst we have no reason to believe the above is not accurate it is for general guidance only.  Buick & Co Chartered Tax Advisers and Tax Consultants take no responsibility whatsoever for this blog, its reliability or any actions you take having read it.

30 Day CGT Return to be made on Property Disposals

From 6 April 2020, you will need to report and pay Capital Gains Tax to HMRC within 30 days of completion on the disposal of a residential property in the UK which is not wholly covered by PPR, and a Tax Return will still need to be made.

Full details can be found by using the following link:

GOV.UK

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Whilst we have no reason to believe the above is not accurate it is for general guidance only.  Buick & Co Chartered Tax Advisers and Tax Consultants take no responsibility whatsoever for this blog, its reliability or any actions you take having read it.

Autumn Budget 2018

Is it the ‘end of austerity’ as Chancellor Philip Hammond claimed in his Autumn Budget on Monday 29 October 2018?

We’ll leave you to form your own opinion there, but for now here is a brief summary following our review of Budget 2018 which may be of interest to our clients in particular:

  • Tax free personal allowance increased to £12,500 for 2019/20;
  • Basic rate tax band increased for 2019/20; however for Scottish taxpayers the Scottish Government will announce the Scottish income tax rates and bands for 2019/20 in the Draft Budget on Wednesday 12th December;
  • Extending changes to the way self-employment status is taxed (IR35) to the public sector for medium and large private companies from April 2020;
  • Annual Investment Allowance (AIA) – to be increased to £1 Million for all qualifying investment in plant and machinery made on or after 1 January 2019 until 31 December 2020;
  • VAT registration threshold of £85,000 frozen for further two years;
  • Changes to Principal Private Residence Relief/Lettings Relief from April 2020;
  • Changes to Entrepreneurs’ Relief, including minimum qualifying period increased from 12 months to 24 months from 6 April 2019.

Have a look at the information notes on gov.uk’s website for more:

https://www.gov.uk/government/collections/budget-2018

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Whilst we have no reason to believe the above is not accurate it is for general guidance only.  Buick & Co Chartered Tax Advisers and Tax Consultants take no responsibility whatsoever for this blog, its reliability or any actions you take having read it.

Autumn Budget 2017

Chancellor Philip Hammond gave his Autumn Budget on 22 November 2017 but apart from the somewhat poor jokes what was in it for you?!

We think it was perhaps more what he didn’t do that made the difference, specifically by freezing the VAT threshold which had been rumoured to be reduced significantly bringing the extra burden of VAT to more small businesses and their customers.

The ‘headline grabber’ for first time buyers and the temporary reduction in Stamp Duty Land Tax (SDLT) does not, of course, apply here in Scotland with us having the Land and Building Transaction Tax (LBTT) so the ‘Tartan Budget’ is another one to watch out for and Finance Secretary Derek Mackay will be presenting the next Scottish Budget on 14 December.

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