Page 3 - Budget 2021

• The temporary £500,000 0% band for stamp duty land tax will continue to apply for residential property
purchases up to 30 June 2021. The band will then be halved for the following three months before reverting to its
original £125,000 level from 1 October.

• The coronavirus job retention scheme (CJRS – furlough scheme) and the self-employed income support scheme
will be extended to September, albeit with reductions in the final three months of their life.

• The business rates holiday for retail, hospitality and leisure businesses will also be extended. Until June 2021
100% relief will apply and thereafter reduced (and capped) 66% relief will operate until the end of March 2022.

In this Newsletter we look at the impact of the main changes on various groups of taxpayers. The categorisation is
inevitably rather arbitrary, so it pays to read all sections. Similarly, several of the tax planning points – such as those
listed below in our 12 Quick Tax Tips – are universal.

If you need further information on how you will be affected personally, you are strongly recommended to consult
your financial adviser.

12 QUICK TAX TIPS

1. Don’t waste your (or your partner’s) £12,570 personal allowance in 2021/22.

2. Don’t forget the personal savings allowance, reducing tax on interest earned.
3. Don’t ignore the dividend allowance, eliminating tax on £2,000 of dividends.
4. Don’t dismiss National Insurance contributions – they are really a tax at up to 25.8%.
5. Think marginal tax rates – the system now creates 60% (and higher) marginal rates.

6. ISAs should normally be your first port of call for investments and then deposits.
7. Even if you’re eligible for a LISA, you still might find a pension is a better choice.
8. Tax on capital gains is usually lower and paid later than tax on investment income.

9. Trusts can save inheritance tax, but suffer the highest rates of CGT and income tax.
10. File your tax return on time to avoid penalties and the taxman’s attention.
11. If you are entitled to a company car, going hybrid or electric could slash your tax bill.
12. Don’t assume HMRC won’t know: automatic information exchange is now widespread.

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