{"id":20782,"date":"2021-03-11T15:52:41","date_gmt":"2021-03-11T15:52:41","guid":{"rendered":"https:\/\/smh.group\/?p=20782"},"modified":"2021-03-11T16:25:02","modified_gmt":"2021-03-11T16:25:02","slug":"the-spring-2021-budget","status":"publish","type":"post","link":"https:\/\/devstagesite.co.uk\/smhgroup\/the-spring-2021-budget\/","title":{"rendered":"The spring 2021 Budget"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\"><strong>A quiet turning of the tax screw.<\/strong><strong> <\/strong><strong><\/strong><\/h2>\n\n\n\n<p>Just before the Budget arrived on 3 March, it seemed as if the Chancellor would have nothing to say that was not already public knowledge. However, while some of the many leaks were confirmed, none of the pre-Budget pundits correctly predicted the Chancellor\u2019s strategy. Instead of cutting borrowing, Mr Sunak <em>increased<\/em> it sharply in 2021\/22 over the estimates produced just four months earlier in his Spending Review.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>The Chancellor\u2019s approach was:<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>To stimulate investment in the next two years with extremely generous allowances. In effect, for every \u00a31,000 a company invests in new plant and machinery, the government will reduce their corporate tax bill by \u00a3247.<\/li><li>To pay for this largesse and start to repair public finances:<ul><li>From April 2023, when the enhanced investment allowances end, the rate of corporation tax for companies with profits of at least \u00a3250,000 will jump by 6%, from 19% to 25%.<\/li><\/ul><ul><li>Many personal tax thresholds, bands and allowances will be frozen until the end of 2025\/26. &nbsp;<\/li><\/ul><\/li><\/ul>\n\n\n\n<p>The big freeze of everything from the pensions lifetime allowance to the inheritance tax nil rate band counts as a stealth tax. Look at the raw numbers and there is no increase in tax \u2013 everything stays the same. In practice, the effect of inflation will take its toll. As incomes and wealth rise, thresholds are crossed and tax bands filled more quickly. More people become taxpayers and all taxpayers pay more tax.<\/p>\n\n\n\n<p>A good (or possibly bad) example is the inheritance tax nil rate band, which was set at its current \u00a3325,000 level (now running through to 2026) way back in April 2009. Had the band been linked to the CPI inflation index, it would be about \u00a390,000 higher in 2021\/22. That difference equates to an extra \u00a336,000 in inheritance tax at the standard 40% rate.<\/p>\n\n\n\n<p>In other words, you may think you were spared higher tax bills by the Chancellor, but that is not necessarily the case. Tax planning is still important and will become more so as the freeze drags on to 2026, contact our <strong><span style=\"text-decoration: underline;\"><a href=\"https:\/\/devstagesite.co.uk\/smhgroup\/financial-services\/\">Financial Services<\/a><\/span><\/strong> department on <strong>0114 266 4432<\/strong> or <strong><span style=\"text-decoration: underline;\"><a href=\"mailto:info@smhca.co.uk\">info@smhca.co.uk<\/a><\/span> <\/strong>if you need to discuss yours.<\/p>\n\n\n\n<h6 class=\"wp-block-heading\"><em>The value of tax reliefs depends on your individual circumstances. Tax laws can change. The Financial Conduct Authority does not regulate tax advice.<\/em>&nbsp;<\/h6>\n","protected":false},"excerpt":{"rendered":"<p>Just before the Budget arrived on 3 March, it seemed as if the Chancellor would have nothing to say that was not already public knowledge. However, while some of the many leaks were confirmed, none of the pre-Budget pundits correctly predicted the Chancellor\u2019s strategy. Instead of cutting borrowing, Mr Sunak increased it sharply in 2021\/22 over the estimates produced just four months earlier in his Spending Review.<\/p>\n","protected":false},"author":4,"featured_media":20188,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[3,16],"tags":[736,737,13,78,24,19,14],"class_list":["post-20782","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-smh-accounting-business-advisory","category-financial-services","tag-budget-2021","tag-chancellor","tag-inheritance-tax","tag-investment","tag-pensions","tag-tax","tag-tax-planning"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The spring 2021 Budget - SMH Group Financial Services<\/title>\n<meta name=\"description\" content=\"Just before the Budget arrived on 3 March, it seemed as if the Chancellor would have nothing to say that was not already public knowledge. 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