So, we've had the budget. The speculation is over. We already knew some of the big announcements in advance and, as anticipated, this was a Budget dominated by COVID-related measures. The personal tax changes had been a more closely guarded secret and so what have we learnt:
We already knew that the stamp duty holiday, cutting the rate of stamp duty to zero on all properties worth £500,000 or less, would be extended until the end of June. It was announced in the Budget that there would be a tapered extension beyond June, with the zero rate of stamp duty continued until the end of September for properties worth £250,000 or less, before reverting back to the previous threshold of £125,000 on 1st October.
The chancellor confirmed that the threshold for paying the basic rate will rise to £12,570 next year and for higher-rate payers, the threshold will be £50,270. Both rates will then stay the same until 2026, meaning that more people will fall into the higher bands and more will become tax payers for the first time as wages rise over the course of the next 5 year. This seems somewhat at odds with the Chancellor's statement that "nobody's take-home pay will be lower".
The IHT Nil Rate Band (currently £325,000) will be frozen until April 2026.
CAPITAL GAINS TAX
There was much speculation about possible increases in CGT rates, but the Chancellor held off increasing the rates of CGT, for now at least, and instead froze the CGT annual allowance (currently £12,300 per person) until April 2026.
As anticipated, corporation tax will rise, although not until 2023, at which point it will rise to 25%, but only for businesses with profits of over £250,000. As Rishi was happy to point out, this will mean that the UK still has the lowest corporation tax rate in the G7. Although the corporation tax rise will be seen as steep in some quarter this is offset to a degree by the announcement of a "super-deduction" that will allow companies for the next 2 years to reduce their tax bill by up to 130% of the value of any investment made.
All in all not too many surprises, perhaps other than the Chancellor declining to increase the CGT rates. The Budget Report is unlikely to bring any surprises, but the devil is in the detail so lets wait and see.
Chancellor Rishi Sunak is unveiling the contents of his Budget in the House of Commons. He is announcing the government's tax and spending plans for the year ahead, expected to focus on helping business and jobs through the pandemic and supporting the UK's long-term economic recovery.