Budget Update – October 2021

 

Yesterday we heard Rishi Sunak deliver his Autumn budget statement to parliament. Here’s a brief summary of what was announced.

Business Rates

The business rates multiplier will be frozen from 1^st April 2022 until 31^st March 2023.

Eligible businesses in the Retail, hospitality and retail sectors can benefit from a 50% relief in the next financial year (2022/23) (up to £110,000).

Business Rates revaluations will change from every 5 years to every 3 years starting in 2023.

Fuel Duty

Given the recent rise in fuel costs, the planned rise in fuel duty has been scrapped and will remain frozen at 57.95p for a further 12 months.

Air Passenger Duty

Flights within the UK will be subject to a new lower domestic band of £6.50 air passenger duty from 1^st April 2023.

A new ultra-long-haul band of £91 will be introduced for flights over 5,500 miles.

Alcohol Duty

The complicated Alcohol duty regime will be simplified from 15 bands to 6 and be based on alcohol strength. These changes will be implemented from 1^st February 2023.

Pensions

The ‘Net Pay Anomaly’ will be addressed. This is where those who contribute to their company pension via the net pay method but earn less than the Personal Allowance do not receive 20% tax relief as they would if they contributed to a pension via relief at source.

The solution will apply from the tax year 2024/25 and will be paid as a payment to the individual rather than a top up to their pension.

National Insurance Contributions

Announced in September, there will be an increase of 1.25% on NICs for Class 1 (employee/employer) and Class 4 (self-employed profits) NICs for the tax year 2022/23. The following tax year (2023/24), this additional 1.25% will be removed from NI and split into a separate tax called the ‘Health & Social Care Levy’. It will be used to fund investment in the NHS & social care.

When separated out, this charge will also apply to the earnings of people above the State Pension Age.

Tax On Dividends

The tax on dividends will also be increasing by 1.25% for each tax bracket. The new rates will be 8.75% for basic rate taxpayers, 33.75% for a higher rate and 39.35% for additional rate. This starts in the next financial year (6 April 2022). The £2,000 dividend allowance will remain the same.

ISA’s, JISA’s & Child Trust Funds

The £20,000 annual subscription limit for ISA’s and the £9,000 annual subscription limits for JISA’s and Child Trust Funds will remain the same for the next tax year, 2022/23.

Property Capital Gains Tax

From the 27^th October 2021, the deadline for reporting and paying CGT after selling UK residential property will extend from 30 days after completion