2021 Budget – what you need to know
3 March 2021
Today Chancellor Rishi Sunak MP delivered the Budget statement. Here is a summary of the key points which might be of interest to you.
From the next financial year, the amount you can earn before paying tax will rise from £12,500 to £12,570, and the threshold for the higher rate of tax will increase from £50,000 to £50,270. After that, these thresholds will be frozen until 2026.
The pensions lifetime allowance and inheritance tax threshold will also be frozen until April 2026.
Corporation tax will rise from 19% to 25% from April 2023. Companies with profits of less than £50,000 will still pay 19%, and there will be a sliding scale between £50,000 and £250,000, with only companies with profits above £250,000 paying the full 25%.
Furlough and support for the self-employed
The furlough scheme will be extended until the end of September. Employees will continue to receive 80% of their wages until the scheme ends, but firms will be asked to contribute 10% in July and 20% in August and September as the scheme is gradually phased out.
The self-employment income support scheme has also been extended. The fourth grant will cover February to April, and will be worth 80% of average trading profits up to £7,500. Eligibility criteria will remain the same as in the third grant, meaning self-employed dentists with average income of over £50,000 a year will not qualify.
As the government-backed bounce back loan and coronavirus business interruption loan schemes come to an end, the Chancellor confirmed the Treasury will launch a new Recovery Loan Scheme to run until the end of the year. Businesses will be able to borrow between £25,000 and £10m from the new scheme, with the government guaranteeing 80% of eligible loans.
The government is introducing a 130% ‘super-deduction’ on tax for investments made by companies in qualifying new machinery. This means businesses can cut their taxes by up to 25p for every pound they invest for two years starting this April. There is no detail yet of what kind of investments will qualify for this scheme and we will look for clarity on whether investments into dental practices will be eligible.
Business rates relief will be extended until the end of June, and then reintroduced at a discounted rate for the rest of the year. We continue to question why dental practices have not been eligible for business rates relief and we continue to campaign for it to be extended to dentists and backdated to March 2020.
The government will introduce, by March 2022, an elite points-based visa programme to help fast-track recruitment of highly-skilled workers from around the world. They have also pledged to modernise the immigration sponsorship system to make it easier to use, with more details due to be published in the summer.