On 3rd March 2021 Chancellor Rishi Sunak delivered the Spring 2021 budget. There were significant changes announced in a bid to guide the UK on its road to recovery in the coming months and years.
From 1st April 2023 corporation tax rates are changing! The current rate of corporation tax is 19% and will be changing as follows:
Currently, trading losses can be allocated against profits of the current year, carried back and offset against profits in the previous year or carried forward against future profits. However, for 2020/21 and 2021/22 only , up to £2 million of tax losses will be able to be carried back and offset against profits for the previous 3 years. This applies to both Companies and Unincorporated businesses
Super Deduction Capital Allowances
From 1 April 2021 until 31st March 2023, Incorporated companies only , investing in new Plant and Machinery will be entitled to claim a ‘super deduction’ of 130% first year capital allowances against profits. Cars, second hand plant and machinery and leased assets are all excluded. Unincorporated businesses are also excluded .
Personal allowance will increase from the current £12,500 to £12,570 from April 2021. The basic rate threshold will also increase from £37,000 to £37,700 making the new higher rate threshold £50,270 from April 2021. The new rates will then be frozen until March 2026.
The current VAT registration threshold of £85,000 and the deregistration threshold of £83,000 is to remain in place until 31st March 2024.
All VAT registered businesses will need to be reporting via Making Tax Digital from 1st April 2022. This now includes businesses that are VAT registered but whose revenue has been under the VAT threshold.
If you have any questions, please contact either your client manager or partner by email or by phone.