insideKENT Magazine Issue 108 - April 2021 | Seite 142

BUSINESS

ON WEDNESDAY 3 MARCH , CHANCELLOR RISHI SUNAK TOOK TO THE PODIUM TO UNVEIL HIS 2021 SPRING BUDGET AND TOOK A MEASURED APPROACH , PROVIDING EXTENSIONS TO CORONAVIRUS SUPPORT SCHEMES AND INDEED ANNOUNCING NEW SUPPORT . BELOW , WE EXPLORE THE KEY PERSONAL TAX ANNOUNCEMENTS OF THE 2021 BUDGET IN MORE DETAIL …

BY RICK SCHOFIELD , PARTNER , AZETS rick . schofield @ azets . co . uk

Rates & allowances The tax-free personal allowance throughout the UK will increase to £ 12,570 for the 2021 / 22 tax year .

The basic-rate band will rise to £ 37,700 , while the higher rate threshold will rise to £ 50,270 . The additional-rate band will remain at £ 150,000 . All of these thresholds will remain unchanged until 2025 / 26 .

National living wage The national living wage now applicable to over- 23s increases by 2.2 % from £ 8.72 an hour to £ 8.91 an hour from April 2021 .

National Insurance Contributions ( NICs ) The threshold for class 1 primary contributions paid by employees and the class 4 national insurance contributions ( NICs ) paid by the self-employed will increase from £ 9,500 to £ 9,568 for the 2021 / 22 tax year . levels for each tax year up to and including the 2025 / 26 tax year .

Business asset disposal relief & investors ’ relief The lifetime limit on qualifying gains for business asset disposal relief remains at £ 1m for 2021 / 22 . For investors ’ relief the lifetime limit will also be kept at the current level of £ 10m . The 10 % tax rate remains unchanged .

Pension lifetime allowance The lifetime allowance for pension savings will remain at £ 1,073,100 until the 2025 / 26 tax year .

Marriage allowance The transferable marriage allowance will increase from £ 1,250 to £ 1,260 for 2021 / 22 .

Income Tax rate bands and thresholds

Inheritance tax The individual nil-rate band will continue at £ 325,000 and the residence nil-rate band will also remain at £ 175,000 . The taper threshold for the residence nil-rate band continues to start at £ 2m .

Social investment tax relief The previous end date of the social investment tax relief of 6 April 2021 has been extended to 6 April 2023 .

This applies to investments in qualifying social enterprises and will allow income tax relief and capital gains tax holdover relief for investors to continue .

The class 2 NICs rate for the self-employed will remain at £ 3.05 a week for 2021 / 22 , while the selfemployed small profits threshold will rise to £ 6,515 .

ISAs The subscription limits will remain unchanged . For ISAs , this will be £ 20,000 and for Junior ISAs and child trust funds it will be £ 9,000 .

Trading losses At present , an unincorporated business can claim to offset losses against their net income of the current or previous year , or both years . For trading losses made in 2020 / 21 and 2021 / 22 , you will be able to carry back for a period of three years , with losses being carried back against later years first . Some further restrictions apply .

Personal Allowance Basic Rate Higher Rate * Additional Rate *

Nil 20 % 40 % 45 %

Up to £ 12,570

* The personal allowance is reduced by £ 1 for every £ 2 of income from £ 100,000 to £ 125,140 .

Have you been affected by the Budget or want to know more ?

Over £ 12,570 – £ 50,270 Over £ 50,270 – £ 150,000 Above £ 150,000

To read more analysis of the Budget 2021 , please visit azets . co . uk / news-insights . If you have any queries regarding the announcements and the impact they may have on you or your organisation , please get in touch .

Local offices :

Up to £ 12,500 Over £ 12,500 to £ 50,000 Over £ 50,000 to £ 150,000 Above £ 150,000

Nil 20 % 40 % 45 %

Capital gains tax The current annual exempt amount for individuals and personal representatives of £ 12,300 and £ 6,150 for trustees of settlements will be maintained at these

Accounting | Tax | Audit | Advisory | Technology www . azets . co . uk

Ashford : 01233 629 255 / Canterbury : 01227 454 861 Maidstone : 01622 690 666 / Orpington : 01689 827 505 Sandwich : 01304 249 997

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