Following yesterday’s announcement from the Chancellor, please read our UK Autumn Budget Summary 2021 Review.
Tony Maleham, Director, Tax at Progeny comments:
“The Chancellor has decided not to make any further major changes to the main taxes having already announced national insurance and corporation tax increases to take effect from 6 April 2022 and 1 April 2023 respectively.
This was a low key Budget from a direct tax perspective which was mainly aimed at helping businesses affected by the pandemic by reducing business rates and extending the availability of the £1million annual investment allowance to March 2023. The lower paid will be helped by increases to the minimum wage and universal credit improvements which should offset the increased national insurance burden.
However, despite the tax increases the Chancellor made it clear that he believes in Conservative values of a low tax economy so tax cuts should be expected during the life of this Parliament.”
If you have questions or would like more detailed advice on any of the issues raised in the Autumn Budget, please get in touch. Below are the main headlines:
Autumn Budget 2021
The Chancellor Rishi Sunak presented his third Budget on 27 October 2021. In his speech he set out the plans to “build back better” with ambitions to level up and reduce regional inequality. However, the major changes to headline tax rates have already been announced:
- the increased corporation tax rate to 25% for profits over £250,000 from April 2023; and
- the 1.25% increase to national insurance contributions and dividend income.
The previous decision to freeze personal allowances and capital gains tax reliefs is also an effective tax increase as people start paying taxes sooner and move up the tax bands more quickly. Inheritance tax nil rate bands have also been frozen since 2009 meaning many more estates pay 40% inheritance tax.
Main Budget proposals
Tax measures include:
- a change in the earliest age from which most pension savers can access their pension savings without incurring a tax charge. From April 2028 this will rise to 57
- a new temporary business rates relief in England for eligible retail, hospitality and leisure properties for 2022/23
- the retention of the £1 million annual investment allowance until 31 March 2023
- individuals disposing of UK property on or after 27 October 2021 now have a 60 day CGT reporting and payment deadline, following the completion of the disposal.
Other measures include:
- a complete overhaul of alcohol duties that will see drinks taxed on their strength
- the cancellation of the previously announced rise in fuel duties
- pubs supported with a reduction in draught beer and cider duty
- increases in the National Living Wage and the National Minimum Wage rates
- an ultra-long-haul band of air passenger duty introduced.
Please note that some Budget proposals may be subject to amendment in the Finance Bill 2021-22.