Chancellor Rushi Sunak announced his Budget in the House of Commons on 3rd March 2021. These are the announcements for his plans relating to taxation:
- Maintaining the income tax Personal Allowance and higher rate threshold from April 2022 until April 2026 which means that the personal allowance will be frozen at £12,570 and the high rate threshold frozen at £50,270 from April 2021
- The rate of Corporation Tax will increase to 25%, the increase will not take effect until 2023. Businesses with profits of £50,000 or less, will continue to be taxed at 19% and a taper above £50,000 will be introduced so that only businesses with profits greater than £250,000 will be taxed at the full 25% rate.
- Inheritance tax thresholds will be frozen at their current levels until April 2026.
- Pension life time allowances will be frozen at their current levels of £1,073,100 until April 2026.
- Capital gains tax exemption allowances will be frozen at their current levels until April 2026.
- Fuel duty will be frozen for the 11th consecutive year.
- Alcohol duties will be frozen across the board.
- The amount of SME payable R&D tax credit that a business can receive in any one year will be capped at £20,000 (plus three times the company’s total PAYE and NICs liability).
- The adult ISA annual subscription limit for 2021-22 will remain unchanged at £20,000.