4th March 2021
Budget 2021 Overview
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As you know, we proactively analyse and evaluate all property-related legislative changes monthly, to assess the impact they’re likely to have on our clients and on our software.
Here are our comments on yesterday’s budget:
As expected, the main focus of the Budget was on COVID recovery measures, many of which had been revealed ahead of the Chancellor’s statement.
Everyone anticipates that there will be a need for the government to begin to balance the books after all the COVID-related support spending. Understandably, the government is focused on recovery and getting the economy moving again by supporting businesses and individuals.
However, the first signs of the inevitable “balancing of the books” came with the announcement of the increase in the rate of Corporation Tax to 25%. This increase will not take effect until April 2023. Personal tax allowances are also frozen until April 2026.
Much less widely reported, under the Budget Report section headed “Strengthening the public finances”, was an announcement of a forthcoming Command Paper, “Tax policies and consultations (Spring 2021)”, due to be published on 23 March 2021. We will review this document once it is released and would recommend that our clients look out for this too, as it should give you the opportunity to comment on any proposals that might be significant to your business.
Very few property-specific measures were announced yesterday, but we would like to draw your attention to the three areas below which may be of interest. The reference numbers refer to the full Budget Report, which is available from the link below.
Property Related Business tax
2.45 VAT Deferral New Payment Scheme – If you took advantage of the VAT deferral from 20 March to 30 June 2020 you can now opt to use the VAT Deferral New Payment Scheme. This allows you to pay the deferred VAT in monthly instalments from March 2021, rather than in one lump sum on 31 March 2021.
2.47 Business rates reliefs – extension of business rates reliefs for retail, leisure and hospitality properties, in full to 30 June 2021 and 66% from 1 July 2021 to 31 March 2022.
2.91 VAT threshold – the threshold level, £85,000, for registration and deregistration will not change for two years from 1 April 2022.
The full budget report is available online from HM Treasury here.
"the first signs of the inevitable 'balancing of the books' came with the announcement of the increase in the rate of Corporation Tax"
Roy Benton, Trace Solutions