Here is our summary of what Chancellor Rishi Sunak announced in yesterday’s long-awaited (yet leaked) budget that impacts business, the property market and employment law, aimed at avoiding catastrophic economic downturn as a result of #COVID19 “the pandemic”.
Whilst in the whole the news has been well received and welcomed by individuals and businesses, given not only the extension of fiscal support measures and a hold on tax, what is feared is that the inevitable tax hikes to compensate for huge excess borrowing and financial support will cripple millions within the next few years.
It was confirmed that taxes on large company profits will rise in 2023 and a million more people will start and be mandated to pay income tax.
SDLT Extensions confirmed
As had been speculated for some time and revealed in our Budget scoop, the Stamp Duty holiday has been extended in England until 30 June 2021. This means if you are looking to buy a property or are in the process of buying property up to the value of £500,000 you could save up to £15,000!!!!!!!!!
For properties priced at £250,000 and under the stamp duty holiday has been extended for first time homeowners further until 30 September 2021, which is a much welcomed announcement to keep in part the lower end of a chain in tacked.
It was also announced that first time buyers and home movers will be able to apply for a mortgage loan of 95% of the value of a property up to a maximum value of £600,000 from April 2021, provided borrowers have access to 5% deposit.
From speaking with our network of advisors, we have been advised that multiples for the 95% mortgage will be lower than that of current mortgage requirements.
Financial Covid support
The Chancellor unveiled more support for workers and businesses struggling with lockdown.
(i) The furlough scheme will be extended to September with the Government to continue paying 80% of employees' wages for hours they cannot work, Employers to be asked to contribute 10% in July and 20% in August and September.
(ii) Support for the self-employed also to be extended until September.
(iii) 600,000 more self-employed people will be eligible for help as access to grants which are already in place are widened to open up the gates for more people.
(iv) £20 weekly uplift in Universal Credit worth £1,000 a year is to be extended for an additional six months.
(v) Working Tax Credit claimants will receive a £500 “bonus” one-off payment.
(vi) Minimum wage across the board is to increase to £8.91 an hour from April
(i) No changes to rates of income tax, national insurance or VAT
(ii) Tax-free personal allowance to be frozen at £12,570 from April 2021 levels to 2026
(iii) Higher rate income tax threshold to be frozen at £50,270 from April 2021 levels to 2026
(iv) Corporation tax on company profits above £250,000 to rise from 19% to 25% in April 2023
(v) Rate to be kept at 19% for about 1.5 million smaller companies with profits of less than £50,000
(vi) Stamp duty holiday on house purchases in England and Northern Ireland extended to 30 June
(vii) No tax charged on sales of less than £500,000
(viii)Inheritance tax thresholds, pensions life time allowances and annual capital gains tax exemptions to be frozen at 2020-2021 levels until 2025-26
(i) Tax breaks for firms to "unlock" £20bn worth of business investment
(ii) Firms will be able "deduct" investment costs from tax bills, reducing taxable profits by 130%
(iii) Incentives for firms to take on apprentices to rise to £3,000 and £126m for traineeships
(iv) Lower VAT rate for hospitality firms to be maintained at 5% rate until September
(v) Interim 12.5% rate will then apply for the following six months
(vi) Business rates holiday for firms in England to continue until June with 75% discount after that
(vii) £5bn in Restart grants for shops and other businesses in England forced to close
(viii)£6,000 per premises for non-essential outlets due to re-open in April and £18,000 for gyms, personal care providers and other hospitality and leisure businesses
(ix) New visa scheme to help start-ups and rapidly growing tech firms source talent from overseas
(x) Contactless payment limit will rise to £100 later this year
So by and large it looks like everyone is a winner on the Rushi Roulette table, at least for the next 2 years……… For more information please call 0208 3634444 and speak with one of our dedicated #COVID19 partners for all and or any of your commercial or personal needs.