Budget for 2021 announced
- Published: Wednesday 03 March, 2021
- By: Commercial Trust
On the 3rd of March, the Chancellor has outlined the Budget for 2021, we take a detailed look at the aspects of this announcement that will directly affect the landlord community.
The stamp duty land tax holiday, which has been making headlines since it was introduced in July 2020, saw the temporary lifting of the tax-free banding for SDLT raised to £500,000 until March 31st 2021.
There has been growing pressure from within the government and external sources for an extension to the holiday.
Recently, the petition demanding the extension gained enough support to be debated within the House of Commons.
It was reported by the Times in late February that the chancellor was due to announce an extension of this holiday until June 31st.
Today we finally have confirmation that the chancellor is extending the deadline for this SDLT holiday until the 31st of June due to the “sheer volume” of transactions.
Alongside this, it was also announced that the nil rate threshold will remain higher than usual, at £250,000, until the end of September.
This means that the nil rate will return to the original threshold of £125,000 only from the first of October.
Furlough scheme and self-employed
Whilst the roadmap out of lockdown has set goalposts for when services will resume as “normal”, some individuals won’t be able to return to work for a long time.
The Furlough scheme, which has paid 80% of employees’ wages instead of them being let go from positions has today been extended until September.
Whilst this is a step in the right direction for helping those who are unable to work currently still pay bills and possibly rent, Labour has commented that this scheme should have been extended “months ago”.
Interlinked with the furlough scheme extension, some 600,000 more self-employed people will also be eligible for government help as access to grants is widened.
The announcement today will hopefully provide some relief to landlords concerned about tenant income, at least for the upcoming summer months.
Rishi Sunak also announced today that in 2023 he will raise corporation tax to 25%.
This has been combined with the creation of a Small Profits Rate to ensure only businesses with profits of over £250,000 will be taxed at the 25% rate.
Those above the threshold will be split into smaller categories, meaning only 10% of all companies will pay the full higher rate.
Alongside this, on income tax, the threshold for paying the basic rate will rise to £12,570 next year.
For higher-rate payers, the threshold will go up to £50,270 and both rates will stay the same until 2026.
The VAT registration threshold will remain at £85,000 until 2024.
This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.