2021 Budget | My Reaction | Everything You Need to Know!

03/05/21 • 15 min

There have been many predictions of market crashes, recessions and a great depression looming in the next few years and many people have been anxiously awaiting Chancellor Rishi Sunak’s 2021 budget briefing. Join Mark today as he depicts the budget and explains what this means for you. Mark discusses the freeze of the nil rate allowance, the increase of cooperation tax to 25% and the end of the bounceback schemes.

KEY TAKEAWAYS

It is going to take a while for the economy to recover. The first thing the chancellor Rishi Sunak has said is that there will be no increase on income tax, national insurance or VAT, however he will freeze the nil rate allowance which typically rises every year. He will also freeze the top tax rate. These strategies are a slightly less visible way of taking the money back, and it does not happen straight away.
Many people thought that the capital gains tax rates would go up however Rishi stayed silent on this matter. Rishi also confirmed that he would not change the inheritance tax allowance and would not change the pension lifetime limit which is £1million.
Unlike reports of corporation tax going up to 23% he is going to raise the rates to 25%. This rise will not be seen until 2023. The current rate is 19% and many people will notice the 6% rise significantly. Smaller companies with less than £50,000 will still pay 19% and inbetween £50,000 and £250,000 you will pay between 19%-25% depending on how much the company makes in that tax year.
At the end of March when the bounceback loans end there is going to be a new loans scheme where the government is going to guarantee 80% of the loan. The business rates holiday will continue until the end of June with a tapered reduction and the 5% reduced rate of VAT is extended until the 30th September with a 12.5% rate until mid next year.
The big news in the property world is the stamp duty holiday extension. This and the 90% mortgage guarantee will support the lower end of the property market. With all the government support it seems less likely that the market will crash.
All the schemes have given consumers a lot of savings to spend, there is a huge amount of money in savings accounts and as the economy opens up, they are going to go and spend that money and there is likely to be some inflation. As inflation picks up, you could see inflation rise by 3%-5%.

BEST MOMENTS

“It is probably an even bigger hit since world war 2 with the amount the economy has shrunk.”

“That was quite a surprise, in many ways quite dove like, not particularly harsh.”

“Loads of people have cash in their pockets.”

VALUABLE RESOURCES

https://www.progressiveproperty.co.uk

ABOUT THE HOST

Mark has bought, sold or has managed around 1,000 property units for himself, Rob, his family and his investors since 2003. He is a system and spreadsheet geek and has developed a complex, confidential deal analyser system of buying residential, commercial and multi-let properties.

CONTACT METHOD

Email: [email protected]

LinkedIn: https://www.linkedin.com/in/markhomer1

Facebook: https://www.facebook.com/markprogressive

Twitter: https://twitter.com/markprogressive

‘Brought to you by Progressive Media’: https://progressivemedia.uk/

KEY TAKEAWAYS

It is going to take a while for the economy to recover. The first thing the chancellor Rishi Sunak has said is that there will be no increase on income tax, national insurance or VAT, however he will freeze the nil rate allowance which typically rises every year. He will also freeze the top tax rate. These strategies are a slightly less visible way of taking the money back, and it does not happen straight away.
Many people thought that the capital gains tax rates would go up however Rishi stayed silent on this matter. Rishi also confirmed that he would not change the inheritance tax allowance and would not change the pension lifetime limit which is £1million.
Unlike reports of corporation tax going up to 23% he is going to raise the rates to 25%. This rise will not be seen until 2023. The current rate is 19% and many people will notice the 6% rise significantly. Smaller companies with less than £50,000 will still pay 19% and inbetween £50,000 and £250,000 you will pay between 19%-25% depending on how much the company makes in that tax year.
At the end of March when the bounceback loans end there is going to be a new loans scheme where the government is going to guarantee 80% of the loan. The business rates holiday will continue until the end of June with a tapered reduction and the 5% reduced rate of VAT is extended until the 30th September with a 12.5% rate until mid next year.
The big news in the property world is the stamp duty holiday extension. This and the 90% mortgage guarantee will support the lower end of the property market. With all the government support it seems less likely that the market will crash.
All the schemes have given consumers a lot of savings to spend, there is a huge amount of money in savings accounts and as the economy opens up, they are going to go and spend that money and there is likely to be some inflation. As inflation picks up, you could see inflation rise by 3%-5%.

BEST MOMENTS

“It is probably an even bigger hit since world war 2 with the amount the economy has shrunk.”

“That was quite a surprise, in many ways quite dove like, not particularly harsh.”

“Loads of people have cash in their pockets.”

VALUABLE RESOURCES

https://www.progressiveproperty.co.uk

ABOUT THE HOST

CONTACT METHOD

Email: [email protected]

LinkedIn: https://www.linkedin.com/in/markhomer1

Facebook: https://www.facebook.com/markprogressive

Twitter: https://twitter.com/markprogressive

‘Brought to you by Progressive Media’: https://progressivemedia.uk/

Previous Episode

Steve Lawsdown: Billionaire Investor Co Founder of Hargreaves Lansdown

Join Mark Homer today as he interviews co-founder of award winning investment service Hargreaves Lansdown and majority shareholder of Bristol City FC, Stephen Lansdown CBE. Together they discuss the impact the pandemic has had on the financial market globally, why saving for your future is more important than ever and why people should take an active interest in their personal investments.

KEY TAKEAWAYS

There is a lot of value accredited to trail commissions businesses, especially over the last 10-15 years. Company valuations that are based on repeat income seem stronger than those that are taking a one off chunk. If you’re giving a good service then a client will stay loyal to you and you will continue to take that income. The more clients you get the more assets you have got and the more fees you generate.
Governments are so much in debt due to the financial crisis and the pandemic, that you have to make your own precisions which is why saving is so important. Financial services platforms are in a good position to service that market. Healthcare, technology and renewable energy are good investment opportunities for now and the future.
Whilst the timing of it is hard to predict, the reality is there will be inflation at some point. Inflation is needed because that is how assets recover and how we get ourselves out of debt. Cash is not great at the moment and the alternative to that is equity investment which is why the stock market is benefiting massively.
There has always been a herd instinct in investment and many people tend to follow the crowd. You can follow it too far, and that is what makes the market. The market will not go up forever, and it will not go down forever, it will adjust along the way.
A wise way to use your money is to firstly ensure you have a certain amount in cash to meet your short term expenditure so that you are never caught short. Secondly, get some income that gives you a guaranteed return with fixed interest rates. Finally look towards investing in growth and income with either equity or property.
The fixed interest market is more of a property rental market these days. If you can find a good property/properties that can give you a good yield and can ensure you a good, guaranteed income then you can budget accordingly and make further investments along the way.
People should take an active interest in their investments, that is what the platform Hargreaves Lansdown has done for people. It allows people to look at all their investments in one place, to make decisions very quickly and to get information on those investments. You have got to plan for your later life and your family at the earliest possible stage. The stock market and investments markets are the best place to do that.

BEST MOMENTS

“It was because other people were stealing our food off the table we decided to beat them at their own game.”

“As long as we give you a good service, as long as we make sure your money is secure and you’re happy and confident in what we’re doing, then you’re going to give us the instructions to do every transaction that you possibly can.”

“The moment of truth arrives as to where all the balls are going to land once the government starts to withdraw stamp duty holiday, furlough, grants and all the rest of it.”

“Everyone makes loads of money until the money stops coming in, and then it falls apart.”

“There is no working together for the common good.”

“They are all the ingredients for a good all around investment attitude.”

ABOUT THE GUEST:

Stephen Philip Lansdown CBE is an English-born Guernsey billionaire. He co-founded the British financial services firm Hargreaves Lansdown with Peter Hargreaves. He is a founder of Bristol Sport and majority shareholder of Bristol Bears, Bristol Flyers, and Bristol City Football Club. Lansdown was appointed Commander of the Order of the British Empire (CBE) in the 2017 Birthday Honours for services to business and the community in Bristol.

ABOUT THE HOST

Mark Homer is an entrepreneur investor. He has worked with investment since he was 15 years old using the laws of wealth! He is a spreadsheet analyst with an impressive following from major publications i...

Next Episode

My Reaction to Gamestop (GME) & Bitcoin

There are two types of investors. Those who cannot time the market, and those that know they can’t. Join Mark today as he discusses why serious investors should not focus on the short term profits their shares can make and why looking long term is more beneficial. Mark also shares his thoughts on Gamestop, Bitcoin and market predictions.

KEY TAKEAWAYS

The internet has changed the way of investment in the sense that it has managed to group people together to help them learn about investment. Platforms like Reddit have created increased, co-ordinated effort from smaller investors who are investing in things on a very short term basis. They are effectively day trading.
When you buy shares you should be looking to have them for at least 5-10 years. You should aim to invest in something that you believe in and that is fundamentally a good company. This is because, even if the company takes a long time to be viewed as a worthy investment, it is one that you have confidence in and where the market will come to recognise the value of that business.
It is not advisable to invest a lot of your net worth into Bitcoin. This is because it is a very high risk strategy with huge girations. The technology behind Bitcoin is supposedly very secure but it is encrypted. It is not beyond the realms of imagination that Bitcoin could get hacked.
Many of the people that are investing in Bitcoin have a very superficial understanding of it. Nobody can predict whether it is going to go up or down. People are wanting to time a market that is not timeable. There is not an individual who can predict the short term movements of this stuff.
Those who are serious about investing should not focus on the short term movements of stock. They should instead, be focusing on the medium to long term results. Good and clever investors can make good and informed predictions. There are two types of investors, those who cannot time the market and those who know they can't.

BEST MOMENTS

“I didn't realise that Reddit would have this much of an impact.”

“There are going to be winners, and there are going to be losers”

“There is no intrinsic value, which is not great.”

VALUABLE RESOURCES

https://www.youtube.com/user/progressiveproperty https://

www.progressiveproperty.co.uk/the-progressive-co-founders/

ABOUT THE HOST

CONTACT METHOD

Email: [email protected]

LinkedIn: https://www.linkedin.com/in/markhomer1

Facebook: https://www.facebook.com/markprogressive