2021 Budget : Key points impacting businesses and individuals

With the UK having been adversely affected by the coronavirus (COVID-19) pandemic, Chancellor Rishi Sunak presented the 2021 Budget against a backdrop of ongoing economic hardship.

Please find enclosed a link to our 2021 Budget Summary Report intended to provide an overview of some of the key points affecting businesses and individuals.

These include:

Corporate Tax – Highlights :

  • 25% main rate of Corporate Tax (CT) from April 2023
  • Return of tiered CT rate system from April 2023 creating additional complexities
  • Temporary extension to the loss carry back period. Companies will be able to carry back losses up to three years (instead of the usual one year) for up to a maximum of £2 million of tax losses for each of 20/21 and 21/22
  • A new 130% Super Deduction for companies which have purchased qualifying capital assets
  • Introduction of a cap on the amount of Research & Development tax relief an SME can claim from 1 April 2021
  • Extension of Enterprise Management Incentive working time requirement exception for furloughed and reduced hour employees to 5 April 2020

Personal Tax – Highlights

  • The Personal Allowance, Basic Rate Band, Capital Gains Annual Exemption, Inheritance Tax Nil Rate Band, Resident Nil Rate Band and the Standard Lifetime Allowance were all frozen, giving effective tax rises without breaking the triple tax lock manifesto pledge
  • The Self-Employed Income Support Scheme was extended until September 2021 and opened to the newly Self-Employed for the first time.
    We are also pleased to enclose our summary of the Chancellor’s 2021 Budget.

The report provides an overview of the key announcements arising from the Chancellor’s speech. It also looks beyond these measures and offers details on the less-publicised changes that are most likely to have an impact upon your business and your personal finances.

Additionally, throughout the Summary you will find informative comments to help you assess the effect that the proposed changes may have on you and your business, as well as the 2021/22 Tax Calendar.

If you would like more detailed, one-to-one advice on any of the issues raised in the Chancellor’s Budget speech, please contact your usual Beavis Morgan partner.