Rishi Sunak’s Budget 2021| BIG changes to the property + Buy-to-Let market Explained in detail

Topic: Chancellor Rishi Sunak’s Budget Speech

Introduction

Welcome back to our channel and podcast! My name’s Gemma, and here at WS we talk about all things relating to money, mortgages, and positive money mindset.

On today’s episode of Let’s Talk Money and Mortgages, we’re joined by Weejay, co-founder and director of WOS Accountancy. With nearly 20 years of industry experience, he’ll help us unpack the key points from the latest budget.

How Is This Budget Different?

Weejay explains:

• Post-Brexit budget: This is the first budget after Brexit, so expectations were high.
• Pandemic influence: With the pandemic, there’s been a balancing act. Last year saw huge government support (grants, furlough), but now it’s about repaying those costs.
• Overall, it wasn’t the greatest or the most disappointing budget—it struck a cautious balance.

Stamp Duty Holiday Extension

Originally due to end in March, the stamp duty holiday has been extended until June.

Key points:

• Properties up to £500,000: No stamp duty until end of June.
• From July to September: The nil-rate band reduces to £250,000.
• From October onwards: Returns to the normal £125,000 threshold.

This interim arrangement has caused some confusion, but essentially it’s a phased return to normal.

95% Mortgages

From April, high street lenders like NatWest, HSBC, Lloyds, and Santander will offer 95% mortgages.

• Applies to properties up to £600,000.
• Can be used for both new and second-hand properties.

This, combined with the stamp duty holiday, creates a strong opportunity for first-time buyers.

IR35 Changes

Private sector IR35 rules are going ahead from 6th April.

Contractors must speak to their recruiters or clients about how contracts will be managed under the new rules.

Capital Gains Tax Rumors

Concerns about CGT being aligned with income tax did not materialize.

Positive for contractors considering liquidating companies and claiming entrepreneurs’ relief.

Unemployment Concerns

The Chancellor addressed rising unemployment with:

• Furlough scheme extension: Now running until September, giving employers time to phase back staff.
• Self-Employed Income Support Scheme (SEISS): Extended for the next two quarters.

Note: Limited company directors (who take dividends) still receive no direct support, despite lobbying.

Personal Taxes

Personal allowance: Increased slightly from £12,500 to £12,570.

Higher-rate threshold: Increased from £50,000 to £50,270.

Both thresholds will be frozen until 2026, meaning no inflation-linked increases.

Corporation Tax

From 2023, corporation tax will rise:

• Profits up to £50,000: Stay at 19%.
• Profits above £250,000: Increase to 25%.
• Profits between £50k–£250k: Pay a marginal rate.

This means small landlords with SPVs won’t be heavily impacted, but larger businesses will.

Super Deduction Scheme

Businesses investing in equipment or machinery can deduct 130% of the cost against taxable profits.

Example: Spend £1,000 → Deduct £1,300.

Designed to encourage investment and expansion.

Other Business Support

Recovery Loan Scheme: Replaces bounce back and CBILS loans, with up to £25,000 available (80% government-backed).

Help to Grow / Help to Digitalize: Initiatives to support business growth and digital transformation.

Accountant’s Perspective

Weejay’s personal view:

• The budget was cautious.
• Disappointments: Lack of recognition or funding for NHS staff and limited company directors.
• Political angle: Raising taxes now allows room for giveaways closer to elections.
• Would have preferred greater support for small businesses and entrepreneurs to fuel faster recovery.

Key Takeaways

• Personal taxes: Minimal change, thresholds frozen until 2026.
• Capital gains tax: No change—good news for contractors.
• Stamp duty holiday & 95% mortgages: Strong opportunities for homebuyers.
• Corporation tax: Big changes ahead from 2023, though small businesses are less affected.
• Super deduction & recovery loans: New measures to encourage business investment and cash flow support.

Final Reminder

This advice may not apply to everyone—please consult an accountant or mortgage broker before making decisions.

As a mortgage is secured against your property, it may be repossessed if you do not keep up with repayments.

Stay safe, and join us next week for another episode of Let’s Talk Money and Mortgages.