Spring Budget 2021 - Rural Perspective
Are you aware of the possible tax relief and support available from Budget 2021?
Mike Atkin, Account Manager, Rural Team
By Mike Atkin & Robert Black, Accounts Managers, Farming and Rural Business.
The Chancellor unveiled his highly anticipated budget on the 3 March 2021 with protecting jobs and livelihoods as the key points of his speech.
The announcement of freezing existing Income, Capital Gains and Inheritance Tax thresholds and rates until 2026 was not unexpected and due to previous promises left little scope for areas of increasing taxes.
Corporation Tax, as expected would be the area of focus. The Chancellor announced an increase in Corporation Tax from 1 April 2023:
To balance the raise in corporation tax the Chancellor announced a ‘Super Deduction’. From the 1 April 2021 until 31 March 2023 companies which invest in brand new plant and machinery will benefit from a 130% reduction to profits and could reduce their tax bill by 24.7p for every £1 spent.
In addition to this the Chancellor announced the extension of loss carry back, not only for incorporated but also unincorporated businesses. This temporary extension allows trading losses to be carried back three years.
As well as the tax changes, the Chancellor extended and announced further support for those impacted by the pandemic.
Robert Black, Accounts Manager, Rural Team
For the self-employed, further Self-employed Income Support Scheme (SEISS) Grants are available for a fourth round (Feb-Apr) and fifth round (May – Sep). The newly self-employed in 2019/20 can also now claim support.
Both grants provide 80% of three months profits capped at £7,500. However, the fifth grant has an added minimum turnover reduction of 30% (2020/21 vs 2019/20) and if below 30% the maximum grant that could be received is £2,850.
The Stamp Duty Land Tax Holiday was extended for purchases up to £500k until 30 June, and then between 1 July and 30 September the 0% threshold will reduce to £250k, before returning to the original £125k threshold from 1 October.
The Chancellor also provided several additional business support schemes which could be a lifeline to many rural businesses:
Restart Grants Scheme, similar to grants distributed by local authorities over the past year.
Recovery Loan scheme - £25k - £10m with 80% guarantee given to lenders.
Business rates holiday extension until 30 June, and further relief until 31 March 22.
Job Retention Scheme extended to 30 September 2021.
Although not groundbreaking announcements, many businesses could benefit from the tax changes and support packages available.
Here to help
If you have any questions or wish us to consider the impact for your rural business, please contact us – hello@wrpartners.co.uk