Budget 2021

Changes that may impact landlords;

No increase for Capital Gains Tax
Freezing personal tax thresholds. Will be increased from April 2021 to £12,570, but frozen till April 2026
From 2023, the rate of corporation tax paid by the largest and most profitable businesses will increase. No change where profits are under £50,000
VAT registration threshold remains till 2024
Inheritance tax nil-rate band will be frozen until April 2026
Welfare – Universal Credit £20 a week uplift to be retained for 6 months. Exemptions to the Shared Accommodation Rate for care leavers up to the age of 25 and those under the age of 25 who have spent at least 3 months in a homeless hostel from June 2021.

Unfortunately, the Government did not announce measures to tackle Covid-related rent debt.

Key points at a glance;

Coronavirus support

Furlough to be extended until the end of September
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
Support for the self-employed also to be extended until September
600,000 more self-employed people will be eligible for help as access to grants is widened
£20 uplift in Universal Credit worth £1,000 a year to be extended for another six months
Working Tax Credit claimants will get £500 one-off payment
Minimum wage to increase to £8.91 an hour from April

UK economy shrank by 10% in 2020
Economy forecast to rebound in 2021, with projected annual growth of 4% this year
Economy forecast to return to pre-Covid levels by middle of 2022, with growth of 7.3% next year
700,000 people have lost their jobs since pandemic began
Unemployment expected to peak at 6.5% next year, lower than 11.9% previously predicted
UK to borrow a peacetime record of £355bn this year.
Borrowing to total £234bn in 2021-22

No changes to rates of income tax, national insurance or VAT
Personal income tax allowance to be frozen at £12,570 from April 2022 to 2026
Higher rate income tax threshold to be frozen at £50,270 from 2022 to 2026
Corporation tax on company profits to rise from 19% to 25% in April 2023
Rate to be kept at 19% for about 1.5 million smaller companies with profits of less than £50,000
Stamp duty holiday on house purchases in England and Northern Ireland extended to June, with no tax liability on sales of less than £500,000
No changes to inheritance tax or lifetime pension allowance or capital gains tax allowances

£1.65bn to support the UK’s vaccination rollout
£19m for domestic violence programmes, funding network of respite rooms for homeless women
£40m of new funding for victims of 1960s Thalidomide scandal and lifetime support guarantee
£10m to support armed forces veterans with mental health needs

Tax breaks for firms to “unlock” £20bn worth of business investment
Firms will be able “deduct” investment costs from tax bills, reducing taxable profits by 130%
Incentive grants for apprenticeships to rise to £3,000 and £126m for traineeships
VAT rate for hospitality firms to be maintained at reduced 5% rate until September
Interim 12.5% rate to apply for the following six months
Business rates holiday for firms in England to continue until June with 75% discount after that
£5bn in Restart grants for shops and other businesses forced to close
£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
New visa scheme to help start-ups and rapidly growing tech firms source talent from overseas
Contactless payment limit will rise to £100 later this year

New UK Infrastructure Bank to be set up in Leeds
It will have £12bn in capital, with aim of funding £40bn worth of public and private projects
£15bn in green bonds, including for retail investors, to help finance the transition to net zero by 2050

£1.2bn in funding for the Scottish government, £740m for the Welsh government and £410m for the Northern Ireland executive
750 UK civil servants to be relocated to new Treasury campus in Darlington
£1bn Towns Fund fund to promote regeneration in 45 English towns
£150m for community groups to take over pubs at risk of closure
First eight sites for freeports in England announced