In today’s Spring Budget, Chancellor Rishi Sunak adds £65billion of new measures to support the economy, bringing the total to £355 billion, in order to “unite and level up”. We outline the aspects of the Budget relevant to the property market, personal and business finances.
Moving Home
As anticipated, the Stamp Duty Holiday has indeed been extended by another three months, to the 30th of June. This new date for the nil-rate of tax covers purchases up to £500,000. Between the 1st of July and up until the 1st of October, the nil-rate will cover purchases up to £250,000, before reducing to the usual £125,000.
A mortgage guarantee has been implemented, meaning mortgages on properties up to £600,000 with 5% deposits will receive a Government guarantee. These mortgages are being offered by many large lenders and banks. The Prime Minister is said to be keen to turn Generation Rent into Generation Buy.
Employment
The Furlough scheme has been extended until September. 80% of salary continues to be paid for hours worked. Businesses must contribute 10% from July, and 20% in August and September.
The self-employment grants have been extended until September. A fourth grant runs February to April, and from the 5th of May onwards, the self-employed can claim 80% of their average profits up to £7,500 in July 2021 for a fifth grant. If there is a 30% or more fall in turnover, the full 80% grant applies. If less than a 30% fall in turnover, a 30% grant will apply.
In addition, the newly self-employed (approximately 600,000 individuals) can now claim the fourth and fifth grants, providing they have filed a 2020 tax return.
The National Living Wage will be £8.91 per hour from April, adding £350 a year to full-time salaries. The income tax thresholds increase to £12,570 and £50,270, and both will be frozen until 2026.
Business
Corporation tax increases to 25%, with those reporting profits of £50,000 or less remaining at 19%. This means that just 10% of businesses will be affected by the 6% increase.
For businesses, a new Restart grant has been introduced to allow them to reopen, and a new Recovery loan scheme is on its way. Culture and sports will receive funds to recover from the pandemic. Fuel and alcohol duty will be frozen. The temporary reduced VAT rate is also extended.
Adam Barker, Company Director, shares his stance:
“For me, the Budget is one which fairly represents the balancing act faced by everyone at this time. The decision of when to invest, when to double down, and when to keep your powder dry. However, all markets are confidence-driven;hopefully, the budget will enable businesses and individuals to prepare and move forward with their own roadmap of investments and personal finance goals, based on the clear proposals put forward today. The Stamp Duty extension struck me as delaying the inevitable when it was first leaked, however, with the proposals released today, I think that it shows a consciousness for a slow and considered progression back to pre-COVID-19 standards. The introduction of help for buyers with small deposits can also only been seen as a positive step in the right direction.”
To discuss how these measures may affect you as a seller, purchaser, tenant, or landlord, contact us on 01525 40 22 66 or email ampthill@orchards.co.uk
For all the details in the Spring Budget, visit the Government website here.