Following the Spring Budget announced by Chancellor Rishi Sunak we have put together a summary of the important tax changes that may impact you and your business.
Personal Allowance and Higher-Rate Threshold (HRT):
The income tax Personal Allowance will rise with CPI as planned to £12,570 from April 2021 and will remain at this level until April 2026.
The income tax HRT will rise as planned to £50,270 from April 2021 and will remain at this level until April 2026.
The Personal Allowance applies across the UK. The HRT for savings and dividend income will also apply UK-wide. The HRT for non-savings and non-dividend income will apply to taxpayers in England, Wales, and Northern Ireland.
The rate of Corporation Tax will increase from April 2023 to 25% on profits of over £250,000.
The good news is that the rate for small profits under £50,000 will remain at 19% and there will be relief for businesses with profits under £250,000 so that they pay less than the main rate.
In line with the increase in the main rate, the Diverted Profits Tax rate will rise to 31% from April 2023 so that it remains an effective deterrent against diverting profits out of the UK.
Pensions Lifetime Allowance:
The government will maintain the Lifetime Allowance at its current level of £1,073,100 until April 2026.
Income Tax exemption for employer-reimbursed coronavirus antigen tests for tax year 2020-21 and 2021-22:
This measure will continue the Income Tax exemption for payments that an employer makes to an employee to reimburse for the cost of a relevant coronavirus antigen. There will be no Income Tax liability for the employee or employer.
Continuation of the home office equipment expenses COVID-19 easement for the 2021-22 tax year:
The income tax exemption that allowed employers to reimburse employees, free from income tax and NIC's, for the cost of home office equipment for employee's working from home as a result of the COVID-19 outbreak, has been extended from 5th April 2021 to 5th April 2022.
We hope you find this information useful, get in touch if you need any further information.
Geoff Selby, Business Director
We are specialists in accountancy and offer services for individuals and businesses alike. We support clients here in West Bridgford, Nottingham and throughout the UK.