Corporation Tax is set to increase to 25%, in April 2023. The rate will remain at 19% for businesses with a profit of less than £50,000. The government also announced a super deduction, allowing 130% deduction on investments made by companies.
The government will not increase income tax, national insurance, or VAT, but will freeze personal tax thresholds. The personal allowance will remain at £12,750 until 2026, with the higher rate band being fixed at £50,270. The inheritance tax threshold, pension lifetime allowance and annual exemption allowance will also be frozen.
The self employment income support scheme has been extended, to include the self employed who submitted a 2019/20 tax return. There will also be a fifth grant, which will be determined by the turnover reduction. For those who’s turnover has fallen by less than 30%, will receive a 30% grant capped at £2,850.
The furlough scheme has been extended for six months, to September 2021. There will be a gradual phase out, with the employer having to contribute 10% in July and 20% in August and September. The employer will continue to have to pay employer’s national insurance and pension costs.