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Budget 2021 – Takeaways for Landlords

Key takeaways for landlords from budget 2021.

by Ravi Saini

In today’s Budget speech by Chancellor Rishi Sonak to Parliament, no new unpleasant surprises were made for Landlords.

Landlords’ concern about inflationary pressure being released by the Bank of England raising interest rates. According to the Office for Budget Responsibility, CPI inflation will average 4% in the next year. The Chancellor doesn’t see it as a problem in the medium term that needs to be addressed immediately by the Bank of England. It is the rapid post lockdown recovery in demand that is not matched by recovery of supply. It became worst by supply chain crises, and the doubling of energy costs caused by supply problems.

To ensure tenant affordability, the National Minimum Wage will rise 6.6% from £8.91 and £9.50 next year. The Universal Credit taper rate has been cut 8% from 63% – 55% starting December 1st. This taper rate reduction will offset the termination of temporary £20 increase in UC for working families.

The planned increase by 1.25% in national insurance and dividend tax rates is still being implemented. It will be effective April 2022.

The corporation tax will rise to 25% by April 2023. Small businesses that have profits below £50,000 will continue to be subject to the 19% rate. Businesses with profits exceeding £50,000 will see a reduction in tax rates. Only businesses earning more than 250000 will be subject to the full 25% tax rate. This means that only 10% of companies will have to pay the higher rate.

Unsafe cladding will be removed at a cost of £5bn. This will be paid for by a Residential Property Developers Tax, which is levied at 4% on developers who make more than £25m. In 2019, 31 such house builders were there.

£550m to address the Courts Backlog

£11.5bn will go towards building 180,000 affordable houses

£640m will go towards Homelessness and rough sleeping.

Enjoy a 50% discount on your business rate for leisure

The plan to raise fuel duty has been again frozen

OBR predicts that the economy will grow by 4% this year, 7.3% in 2022, and then 1.7%, 1.6%, and 1.7% over the next three years.

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