Yesterday, 3 March 2021 the Chancellor, Rishi Sunak, delivered his second Budget.
Given the dire straits of the country's finances due to the effects of the fight against Covid-19 many were expecting tough measures.
Therefore, the Chancellor realized that what the country needs at the moment is a boost to the economy rather than fiscal tightening.
With this in mind he decided not to abolish the Business Asset Disposal relief (previously entrepreneurs' relief) and not to introduce a wealth tax.
Also, no immediate hike in tax rates means that the most feared alignment of capital gain tax to income tax has not materialized.
Please download here our 2021 Budget analysis. Herewith below we highlighted the major tax measures.
From 1 April 2023 the rate of corporation tax will increase to 25% for companies with profits of more than £50,000. The current rate of 19% will apply to companies with profits up to £50,000 with a tapered rate applying to profits between £50,000 and £250,000. The 19% rate will not apply to close investment-holding companies.
Trading losses incurred in the current and next financial years will be allowed to be carried back and offset against profits of the last three years.
Losses will be carried back against later years first and can generate repayments of tax.
Investments in qualifying new plant and machinery between 1 April 2021 and 31 March 2023 will be relieved by a super-deduction of 130%.
Furthermore we will like to report that both the furlough and self-employed income support schemes have been extended until September 2021.
If you would like to discuss any of the above topics or have any query please contact a member of our team.