It has been a long 12 months for many, but the Spring Budget announced various measures to continue support for businesses and employees impacted by the COVID-19 pandemic. In addition, there were proposals to increase the rates of corporation tax and the future freezing of allowances, which will go some way to raising funds to help start the recovery of the economy.
In particular, we saw the Coronavirus Job Retention Scheme and Self-Employed Income Support Scheme extended until 30 September 2021, which is good news for those that qualify. The Chancellor also announced an extension to the business rates holiday to 30 June 2021, with a 66% rates relief available for the remainder of 2021/22, up to a cap of £2m per business.
One of the main Budget headlines was the change to business corporation tax, where the tax rate will increase from 19% to 25% from April 2023. This will only be for companies with profits of £250,000 or more so there will be the return of the small companies’ rate, as companies with profits up to £50,000 will continue to pay corporation tax at 19%, with profits between the two figures being subject to a tapered rate. This could mean that some smaller companies will find their tax burden much higher than they do now.
On a positive note, there has been an announcement aimed at improving growth and productivity as the Chancellor introduced a two year ‘super deduction’ of 130% of investment by companies in qualifying plant and machinery. This will give welcome tax relief to those businesses that are looking to invest over the next couple of years.
Please get in touch if you or your business would like further advice or help in these areas.
Peter Howard & Co.
4 Wharfe Mews, Cliffe Terrace,
Wetherby LS22 6LX.
Tel. 01937 580004