So, a few hours after the Chancellor delivered his latest Budget speech, what is there of interest to us and our clients?
This is categorically NOT intended as a comprehensive summary, but just a few things that we thought would be most relevant.
Coronavirus support:
Furlough scheme to continue until the end of September. Employers will need to contribute 10% in July and 20% in August/September;
SEISS scheme for self-employed also to continue until September. Importantly will also be available for those who only became self-employed in 2019/20 financial year, provided they have already filed a tax return. The amount available depends on the degree that profits have fallen.
Corporation tax
Rates to remain at 19% until April 2023, when the main rate will increase to 25%;
Small companies (profits under £50,000) will still be taxed at 19%, but companies with profits over £250,000 will be taxed at the new 25% rate. Profits between this level will be subject to marginal relief, a return for a concept from 5+ years ago. Tax planning for companies with profits in between the thresholds will be important;
Close investment-holding companies will not benefit from the 19% rate from April 2023, so these will be taxed at 25% regardless of profits, however it looks like this won't include most property companies that let property commercially;
"Super-deduction" of 130% available for investments in plant & machinery from 1 April 2021. A significant and unexpected relief. So if you're thinking of investing in qualifying plant & machinery this month, delay until April!
Other
Stamp Duty Land Tax holiday for purchases under £500k extended from end of March to end of June, reducing to £250k until end of September, then returning to £125k from October;
5% VAT rate for hospitality businesses to continue until September, with an interim rate of 12.5% to follow for 6 months.
What wasn't in there?
No changes to rates of income tax, capital gains tax, national insurance, inheritance tax;
Nothing about a wealth tax;
No attempt to bring dividend tax rates in line with salary rates.
We're still digesting the new measures, but if you have questions, whether an existing or new client, please contact us and we can work through the implications together!
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