An Overview of the March 2021 Budget

On Wednesday 3rd March Chancellor Rishi Sunak presented his second budget. In his speech, he stated his Budget "meets the moment with a three-part plan to protect the jobs and livelihoods of the British people".

Main Budget proposals

Tax deductions, increases and reliefs have been introduced, these tax measures include the following:

A super-deduction for companies investing in new plant and machinery
Between 1 April 2021 and 31 March 2023, companies investing in qualifying new plant and machinery will benefit from new first-year capital allowances. See our 2021 Budget Overview for more information.

A time extension of the temporary increase to Stamp Duty Land Tax
The government will extend the temporary increase to the SDLT nil rate band for residential property in England and Northern Ireland until 30th June 2021.

To find out more download our 2021 Budget Overview.

Reduced VAT rate for hospitality sector
The temporary 5% reduced rate of VAT for certain supplies of hospitality, hotel and holiday accommodation and admissions to certain attractions has been extended until 30th September 2021.

Download our 2021 Budget Overview for more information.

A temporary increase in the carry-back period for business losses
Trade loss carry-back will be extended from the current one-year entitlement to a period of three years, with losses being carried back against later years first.

More information can be found in our 2021 Budget Overview.

An increased rate of corporation tax from 2023
The main rate of corporation tax is currently 19% and it will remain at that rate until 1 April 2023 when the rate will increase to 25% for companies with profits over £250,000. Download our 2021 Budget Overview for more information.

The government has also introduced extensions and guarantees to support people through the pandemic, which include the following:

A new mortgage guarantee scheme
The government will introduce a new mortgage guarantee scheme in April 2021. This scheme will provide a guarantee to lenders across the UK who offer mortgages to people with a deposit of 5% on homes with a value of up to £600,000.

More details can be found in our 2021 Budget Overview.

An extension to the Job Retention Scheme
The Coronavirus Job Retention Scheme has now been extended until the end of September 2021. Full details and eligibility for the scheme can be found here.

A fourth and fifth grant under the Self-Employment Income Support Scheme
The SEISS will now continue until September 2021 with a fourth and fifth grant. These will take into account submitted 2019-20 tax returns. Even if you were unable to claim the previous grants you may still be able to make a claim.

Full details of the scheme can be found here.

An extension to the business rates holiday in England
Scotland, Northern Ireland and Wales have introduced 100% business rates relief mainly aimed at retail, leisure and hospitality businesses. This holiday has now been extended until 30th June 2021.

For more details, please download our 2021 Budget.

Previously announced measures include:

  • A cap on the amount of R&D tax credit paid to a loss-making small or medium-sized enterprise
  • New rules apply to off-payroll working payments made for services provided on or after 6 April 2021. Some Budget proposals may be subject to amendment in the 2021 Finance Act.

You should contact us before taking any action as a result of the contents of this summary.