Claire Carey comments on today’s Budget announcement
Claire Carey, partner, comments on today’s Budget:
“In his second full Budget during unprecedented times, Rishi Sunak has delivered some good news for employers, coupled with some tax changes designed to help start closing the gaping hole in Treasury coffers.”
“As rumoured, the Coronavirus Job Retention Scheme has been extended until the end of September 2021. Currently, the grant covers 80% of a furloughed worker’s salary or wage, up to £2,500 per month, with employers covering the cost of NICs and pension contributions. From July onwards, employers will be asked to shoulder part of the financial responsibility, at the rate of 10% initially, rising to 20% for August and September. This will no doubt come as some relief to employers still reeling from the effects of the pandemic.”
“Since 2012, the lifetime allowance (LTA) has been reduced on successive occasions, finally bottoming out at £1 million in 2016. Since 2018, it has been increasing each year in line with CPI. Amongst a raft of measures designed to freeze tax thresholds, the LTA will be held at its current level of £1,073,100 until 2025/26. This is all a far cry from the LTA’s once lofty heights of £1.8 million. It may also come as a blow to pensions savers whose benefit and retirement planning has been pitched towards the LTA continuing to uprate in line with inflation.”
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