1 min read 4 Mar 21
The Chancellor delivered his budget on 3rd March 2021.
We waited with bated breath to find out if he would start raising revenue through taxation increases or concentrate on support and stimulus for the economy. We got both.
The key announcements affecting the financial planner was a much anticipated change to Corporation Tax and a freezing of tax bands and allowances until 2025/26.
These are expected to raise around £70bn in extra tax revenue with £21bn of that due to the freezing of the mainstream allowances. So plenty of opportunity for the financial planner to show their worth to their clients in reducing tax.
You can find details of all the changes below.
Information on UK tax and allowance for the years 2020/21 to 2022/23
As had been reported the Lifetime Allowance (LTA) for pension savings was frozen at £1,073,100. Similarly the Annual Allowance (AA rules) and the rules on pension tax relief have remained unchanged for 2021/22.
From the 2023/24 financial year the rate of corporation tax will increase to a maximum of 25%.
The Chancellor announced measures for both profits and losses for businesses.
Get all the information on Income Tax and Capital Gains Tax (CGT) that relates to the Spring Budget 2021 from PruAdviser.
The Chancellor announced that the nil rate band (£325,000) and residence nil rate band (£175,000) will remain at existing levels until April 2026.