Rishi Sunak the Chancellor of the Exchequer delivered his budget 2021 today. Below we highlight the key points for individuals:
Income Tax, National Insurance and VAT rates – No changes to current rates of Income Tax, National Insurance or VAT.
Personal Allowance increase – The income tax personal allowance from April 2021 is £12,570 and it will remain at this level until April 2026.
Higher rate threshold increase – The higher rate threshold from April 2021 is £50,270 and it will remain at this level until April 2026.
Furlough for employees – The furlough scheme is extended until 30 September 2021. Employees on furlough leave will receive 80% of their wages until the end of September 2021, up to a maximum of £2,500 per month. Employers will be asked to contribute from 1 July 2021 and details are shown in the ‘Budget update for those in business’.
Universal Credit – The £20 per month uplift in Universal Credit will be extended by six months to help families through the financial impact of COVID-19. Working Tax credit claimants will also receive equivalent support in the way of a one off payment of £500.
Stamp Duty Land Tax (SDLT): Residential Property – The nil rate band (NRB) of £500,000 will be extended by three months to 30 June 2021.
From 1 July 2021, the NRB will reduce to £250,000 until 30 September 2021 when the NRB will be £125,000.
Mortgage Guarantee Scheme – A new mortgage guarantee scheme will begin in April 2021. The scheme will provide a guarantee to lenders who offer mortgages to people with a deposit of 5% on homes with a value up to £600,000. Buyers will be able to fix their initial mortgage rate for at least 5 years and applies to new mortgages up to 31 December 2022.
Fuel duty –The increase in fuel duty for petrol and diesel is cancelled and instead the duty is frozen in 2021/2022.