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UK: The Finance Act 2021 has been given Royal Assent earlier than expected

The UK Finance Act 2021 was expected to be given Royal Assent in July 2021 but was passed earlier than expected.

Key measures include the increases in the corporation tax rate from the current 19% rate to 25% from 2023, the new temporary 130% super deduction first year capital allowances, the temporary extension to the carry-back of trading losses for corporation tax for up to three years and a four-year freeze to income tax thresholds.

Due to the pandemic, there is also an extension of the temporary 5% reduced rate for hospitality and tourism sectors until 30 September 2021. This will be followed by a temporary 12.5% reduced rate for hospitality and tourism sectors until 31 March 2022.

There is also a freezing in the pensions lifetime allowance at £1,073,100 for tax years 2021/22 through to 2025/26.

The Act also paves the way for a new HMRC penalty regime for late filing of returns; late payment of tax; and VAT late payment and repayment interest.

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