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  • The Budget 2021…what you need to know!

It’s really important with any Budget announcements that you work with your accountant to understand what it means to you both over the short and long term.

So here we are again, as we gain hope for a world beyond the heart-breaking global pandemic, today marked the day of our first UK Government Budget of 2021.

Delivered by Chancellor Rishi Sunak, the general premise of the Budget was to protect our economy and communities, supporting the rebuild post COVID-19 and ensuring enough funds to bring our economy back to life. But what does it mean to you personally or your business? Here we pull out a very brief synopsis of the highlights which we want our clients to be aware of…

Corporation tax is on the up

It’s no great surprise, many of us anticipated an increase in Corporate Tax, which was today confirmed to be increased to 6% over two years. Here’s where you should take a moment to review your company strategies and structure with your accountant. What is the impact of a 6% increase in tax on my bottom line and how to manage this? Should I be a Ltd company?? We are here if you want to talk to us about it. Our clients have in-year up to date data at the touch of a button which means we can talk about these changes directly.

Personal tax frozen

The personal tax bandings are frozen, but here’s where you need to think things through. With inflation, a freeze in tax band could result in your paying a higher amount of money in your personal tax if your income increases. A quick chat with your accountant about tax planning within your financial structure could support growth whilst minimising your tax impact. Drop us a message if you want some help in thinking this through.

Time to buy a house?

Last year, the stamp duty exemption was introduced to encourage movement within the housing market, and it worked. People moved homes, renovated them and made changes in their lives during a fairly stagnant time. The government has recognised this success by extending the stamp duty exemption period until June 2021 (for properties up to £500,000). So, if you’re tempted to leverage this great scheme, you’ll need your accounts fully up to date in order to apply for a mortgage or purchase a property. Getting your data accurate and ready to go could be the difference between making the timescale for the stamp duty exemption and missing out. We can help you and our clients benefit from our in-year systems allowing them to obtain their numbers in time

Furlough

Perhaps interesting that this previously unused term, is now a core part of many people’s vocabulary. The furlough scheme has allowed a level of income for those whose livelihoods have been catastrophically impacted by COVID-19. Whilst the scheme hasn’t worked out for everyone, those who have, have no doubt been helped by it. If you’re a business though, this extension, whilst supporting your employees, does mean a longer period of administration from form filling to payroll co-ordination. We have a market leading, supportive payroll service, which is administering furlough schemes and supporting the outsource of administration for our clients. Get in touch if you need any help at all.

Key conclusions

It’s really important with any Budget announcements that you work with your accountant to understand what it means to you both over the short and long term. Understanding the impact allows you to make the right strategic choices such as pricing strategy, company structure and capital investment decisions. At Infinitas we work with our clients throughout the year, continuing to have these discussions, understanding current and future needs and guiding our clients towards the right outcomes for themselves, their families and their businesses.

We are passionate about making financial news and decisions relevant to those who don’t live and breathe accountancy. We want to help you to understand the elements important to your situation and take the pain away which is often associated with the financial responsibilities you may have.

One final thought…

Mr Johnson and Mr Sunak have left us with one thing on our mind…with pubs and restaurants planned to reopen on 12th April and a freeze on alcohol duty…we can’t wait to see you all for a drink soon!

Stay safe everyone.

Please get in touch here, if you’d like to join our conversation or have any questions.


Tags

Accountancy, Budget, Business Plan, Tax


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