Stamp duty land tax in Budget 2021

The Budget 2021 announced that Stamp Duty Land Tax (SDLT) temporary relief to be extended to 30 June 2021. Originally, this relief was going to end on 31 March 2021. The temporary relief amount reduces accordingly after 30 June 2021 and will return to the standard amount of £125,000 from 1 October 2021.

If you are buying a home in England or Northern Ireland you will be able to take advantage of this SDLT temporary relief.

  • £500,000 at 0% from 8 July 2020 to 30 June 2021.
  • £250,000 at 0% from 1 July 2021 to 30 September 2021
  • £125,000 at 0% from 1 October 2021.

The stamp duty Land Tax in Budget 2021 does not apply to properties in Wales and Scotland. These countries have their own separate property tax system.

Below is the Stamp Duty Land Tax at a glance.

Stamp Duty Land Tax Temporary relief for the period from 8 July 2020 to 30 June 2021

This temporary relief applies to first time buyers.

ConsiderationSDLT Percentage
Property purchase cost up to £500,0000%
£500,001 to £925,0005%
£925,001 to £1,500,00010%
above £1,500,00012%
Source: GOV.UK

For example, if you buy a house for £1,550,000 in Mayfair, London in May 2021. Your Stamp duty Land Tax will be calculated as follows:

  • £500,000 @ 0% = £0
  • £425,000 @ 5% = £21,250
  • £575,000 @ 10% = £57,500
  • £50,000 @ 12% = £6,000
  • Total Stamp Duty payable is £84,750.

Stamp Duty Land Tax Temporary relief for the period from 1 July 2021 to 30 September 2021

This temporary relief applies to first time buyers.

CONSIDERATIONSDLT PERCENTAGE
Property purchase cost up to £250,0000%
£250,001 to £925,0005%
£925,001 to £1,500,00010%
above £1,500,00012%

For example, if you buy a house for £1,550,000 in Mayfair, London in August 2021. Your Stamp duty Land Tax will be calculated as follows:

  • £250,000 @ 0% = £0
  • £675,000 @ 5% = £33,750
  • £575,000 @ 10% = £57,500
  • £50,000 @ 12% = £6,000
  • Total Stamp Duty payable is £97,250.

Stamp Duty Land Tax standard rate from 1 October 2021

This temporary relief applies to first time buyers.

CONSIDERATIONSDLT PERCENTAGE
Property purchase cost up to £125,0000%
£125,001 to £250,0002%
The next £250,001 to £925,0005%
£925,001 to £1,500,00010%
above £1,500,00012%

For example, if you buy a house for £1,550,000 in Mayfair, London in November 2021. Your Stamp duty Land Tax will be calculated as follows:

  • £125,000 @ 0% = £0
  • £125,000 @ 2% = £2,500
  • £675,000 @ 5% = £33,750
  • £575,000 @ 10% = £57,500
  • £50,000 @ 12% = £6,000
  • Total Stamp Duty payable is £99,750

Go compare

Property valueStamp duty rates to 30 Jun 2021Stamp duty rates to 30 Sep 2021Standard stamp duty rates from 1 Oct 2021
A house cost £1,550,000£84,750£97,250£99,750
Saving£15,000£2,500Standard rate

From the above comparison, buy a property with the value of £1,550,000 before 30 June 2021 will save you a stamp duty land tax of £15,000 compared to buying it in October 2021. Your saving is reduced to £2,500 if you buy a property of the same value between 1 July 2021 to 30 September 2021.

Filing with HMRC

You must send your stamp duty land tax return to HMRC if your property is cost more than £40,000 even though you have no stamp duty to pay.

Budget 2021

The UK government announced at the Budget 2021 the following subject matters and will legislate them in Finance Bill 2021.

Corporation tax

The corporation tax rate remains at 19% from 1 April 2022 and the rate will increase to 25% from 1 April 2023.

Coronavirus Job Support Scheme

The Coronavirus Job support Scheme is extended to 30 September 2021 across the UK.

Self Employment Income Support Scheme

The self-employment income support scheme is extended to 30 September 2021. People who have filed their self-assessment return in 2019/2020 may be able to claim for the first time.

One-off cash grants of £18,000

A new restart grants for hospitality, accommodation, leisure, personal care and gym businesses in England. If your business falls into these sectors you may entitle to the one-off cash grants of £18,000.

VAT cut for some businesses

VAT to 5% for hospitality, accommodation and attractions is extended to 30 September 2021 thereafter the rate will increase to 12.5% till 31 March 2022.

Statutory Sick Pay (SSP)

If your business have paid staff for self isolating or sick during this pandemic, you can claim the statutory sick pay up to two weeks from the UK government.

Property tax – stamp duty

The stamp duty land tax temporary relief is extended to 30 June 2021. First-time buyers continue to enjoy the tax-free amount of up to £500,000 on a property purchase cost.

The Budget 2021 have been very helpful to help UK businesses to bounce back from this pandemic.

UK income tax rates 2021/2022

Below is the UK income tax rates 2021/2022 to help you to calculate your income tax liability. Your self-assessment period is from 6 April to 5 April and you must deliver your self-assessment return to HMRC by 31 January each year.

England, Wales and Northern Ireland Income tax rates 2021/2022

BANDTAXABLE INCOMETAX RATE
Personal Allowanceup to £12,570 per year0%
Basic rate£12,570 to £37,70020%
Higher rate£37,701 to £150,00040%
Additional rate over£150,00045%
Source: GOV.UK

Scotland Income tax rates 2021/2022

BANDTAXABLE INCOMETAX RATE
Personal AllowanceUp to £12,5700%
Starter rateOn annual earning above the PAYE tax threshold and up to £2,09719%
Basic rateon annual earnings from £2,098 to £12,72620%
Intermediate rate£12,727 to £31,09221%
Higher rate£31,093 to £150,00041%
Top rateabove £150,00046%
Source: GOV.UK

Self-employed through a limited company

If you are self-employed individual trading through a limited company and you withdraw money from your company through salary and dividend payment, your salary and dividend amount enter in your self-assessment return form must agree to your signed and dated company accounts and corporation tax return filed with HMRC.

Your total salary for the tax year can also be obtained from your P60 form.

Take note that corporation tax rates 2020/2022 are not the same as the UK income tax rates 2021/2022.

In addition to the above, there is another important document you must submit to Companies House for your limited company that is your confirmation statement.

If you require help with your company accounts, corporation tax return, self-assessment return and confirmation statement filings, feel free to contact our accountants and they will be more than happy to help you.

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