The budget: at a glance
The latest Budget will see an additional 600,000 self-employed workers eligible for state support, while corporation tax will rise for the first time since 1974
Following a period of extreme personal and financial uncertainty in the UK, the Budget announced on Wednesday 3 March gives practices, optical businesses and optometrists a clearer idea of the parameters they will be operating in as COVID-19 case numbers subside.
For companies with profits over £250,000, corporation tax will rise to 25% from April 2023. Businesses with profits of less than £50,000 will continue to pay 19%.
The Government has extended support to the newly self-employed within the Budget, estimating that an extra 600,000 workers will be eligible for the self-employment income support scheme. The scheme is now available to those who became self-employed in 2019–2020.
The furlough scheme will be extended, with eligible employees receiving 80% of their wages until the end of September. Companies will be asked to contribute 10% of wages in July and 20% in August and September.
Personal tax thresholds will be frozen, with the tax-free personal allowance rising from £12,500 to £12,570 in April 2021 then remaining unchanged until 2026.
The threshold for the higher tax rate of 40% will increase to £50,270 in April 2021 from £50,000 and then remain at that level until 2026.
Welcoming the extension to the furlough scheme, AOP policy director, Tony Stafford, said the move may aid some practices that are still seeing reduced patient footfall because of the pandemic restrictions.
Mr Stafford added: “While help should have come sooner for those who became self-employed during 2019–20, we are also pleased to see those individuals now eligible for financial support, and expect this will help some of our locum members, including those recently qualified.”
However, gaps in support for self-employed individuals remains, Mr Stafford noted, particularly for those earning above the ceiling for support, and those whose income is in the form of dividends.
He continued: “We’ll be looking carefully at the detail and continuing to press for fair treatment for all our self-employed members.”
While the financial ramifications of the pandemic caused the UK economy to shrink in 2020 at a rate last seen in 1709, Chancellor of the Exchequer, Rishi Sunak, has highlighted that the economy is expected to recover at a faster pace than initially predicted. It is thought that the economy will return to its pre-pandemic size by the middle of next year.
As you assess the implications of the Budget for the balance sheet of your practice and your personal finances, OT is keen to hear about issues we should address on our website and upcoming print editions. Please send an email with your thoughts.
I am not eligible32 80%