Chancellor Rishi Sunak has announced an extension of the stamp duty holiday in England, a super deduction capital allowance. Extensions of the Corona virus Jobs Retention Scheme (CJRS) and Self-employment Income Support Scheme (SEISS): and an extension of the VAT cut for the tourism and hospitality sectors.
The Bill will make sure the measures announced in the budget take effect from April 6 2021. It also legislates for tax changes that were previously consulted on and subsequently confirmed at the budget.
The Bill outlines the key measures set to be brought into legislation, including many measures announced in the recent 2021 Budget
- Extensions to stamp duty and VAT cuts and new super-deduction effective from April 2021
- Changes taking effect also strengthen finances and secure investment-led recovery.
The Bill will ensure a number of tax changes set out by the chancellor at last week’s Budget will take effect from the start of the next tax year beginning in April 2021, including:
- The extension of the stamp duty holiday
- Extending the VAT cut for tourism and hospitality to September
As the country begins to recover from the effects of the pandemic, the bill also legislates to help strengthen the public finances in the medium term through:
- Increasing the rate of Corporation Tax 25% on profits over £250,000 from April 2023, balancing the need to raise revenue with the objective of having an internationally competitive tax system. Over 90 per cent of businesses will pay less than 25% percent
- Maintaining Income Tax Personal Allowance and Higher Rate Threshold at 2021 levels. This is a progressive measure: the richest household will contribute the most.
- Keeping the Capital Gains Tax Annual Exempt Amount (AEA), the inheritance tax nil-rate band the pensions Lifetime Allowance at the current levels.
The Bill also help deliver a fairer and more sustainable tax system too through legislating to:
- Implement a Plastic packaging Tax which encourages the use of recycled plastic instead of new plastic within packaging which contains less than 30% recycled plastic content.
- Reform the penalty regime for VAT and income Tax Self-Assessment (ITSA) to make it fairer and more consistent. The new late submission regime will be points-based, and a financial penalty will only be issued when the relevant threshold is reached.
The Bill helps drive investment-led recovery through:
- The “Super deduction” – from 1 April 2021 until 31 March 2023. The independent OBR have forecast that, at its peak, the super-deduction will raise the level of business investment by 10%, or roughly £20bn a year.
- Supporting the introduction of free ports through allowing the government to designate “tax sites” in free ports in Great Britain, where businesses will be able to benefit a number of tax relief.
The Bill will now follow the normal passage through parliament.