Autumn Budget Summary 2021

Kathryn

There was very little content in this Budget that had not been pre-announced in previous budgets or leaked over the last week or so, and certainly no big surprises or headline-grabbing tax cuts!


Here’s a summary of the main announcements:

Individuals

  • 1.25% Health and Social care levy – effectively an increase in Class 1 and Class 4 National insurance contributions – to be introduced from April 2022.
  • From April 2023 the 1.25% levy will also apply to employed and self-employed individuals over the state pension age.
  • Increase in age to access pensions from 55 to 57 from 6 April 2028.
  • Top-up payments will be made to low-earning individuals saving in a Net Pay Arrangement pension scheme from April 2025.
  • No changes to personal allowance which remains at £12,570 until April 2026.
  • No changes to higher rate threshold which remains at £50,270 until April 2026.
  • No changes to capital gains tax annual allowance which remains at £12,300 until April 2026.
  • No changes announced to capital gains tax rates or Entrepreneurs’ Relief.
  • No changes to savings starting rate allowance (£5,000) or personal savings allowance (£500 or £1,000 for lower and higher rate taxpayers).
  • ISA maximum contribution remains at £20,000 per year.
  • Junior ISA and Child Trust Fund contributions remain at £9,000 per year.
  • Minimum wage to increase from £8.91 to £9.50 per hour from April 2022.
  • Inheritance Tax Nil Rate bands remain frozen until April 2026.
  • Pensions lifetime allowance remains frozen at £1,073,100 until April 2026.

Businesses & self-employed

  • Introduction of Making tax digital for income tax to be delayed until 6 April 2024.
  • Basis-period reform delayed with new rules coming into force from 6 April 2024.  Feedback on the previous consultation is expected early November 2021.
  • New penalties for late submission of income tax returns and late payment of income tax introduced from 6 April 2024 for those within MTD, and from 6 April 2025 for other taxpayers.
  • R&D reliefs to be reformed from April 2023 to include data and cloud costs.
  • There will be a consultation on an Online Sales Tax shortly.
  • Annual Investment Allowance limit to remain at £1,000,000 until 31 March 2023 (extended from 31 December 2021).

Companies & shareholders

  • Dividend tax rates to increase by 1.25% from 6 April 2022.
  • Corporation Tax Main Rate to be increased to 25% from 1 April 2023 for profits over £250,000.
  • Corporation Tax Small Companies Rate introduced at 19% from April 2023 for profits under £50,000.
  • Marginal rates of corporation tax will apply to profits between £50,000 and £250,000 from April 2023.
  • There will be a consultation on an Online Sales Tax shortly.
  • An Economic Crime (Anti-Money Laundering) Levy to be introduced from 1 April 2022.  Small companies (with turnover less than £10.2 million) will be exempt.  Fixed fees could range from £5,000 to £250,000 depending on the size of the entity.
  • R&D reliefs to be reformed from April 2023 to include data and cloud costs.
  • Annual Investment Allowance limit to remain at £1,000,000 until 31 March 2023 (extended from 31 December 2021).

Property

  • 30 day reporting and payment deadline for capital gains on disposal of UK residential property to be increased to 60 days for disposals completing on or after 27 October 2021.
  • Residential Property Developer Tax, a 4% charge on annual profits over £25 million, to be introduced from 1 April 2022.
  • ATED charges increase by 3.1% from April 2022.

VAT

  • New late submission and late payment penalties come into effect from accounting periods starting on or after 1 April 2022.

Other announcements

  • Temporary increase in rates of relief for Theatre Tax Relief, Orchestra Tax Relief and Museums and Galleries Exhibition Tax Relief until 1 April 2021.
  • Vehicle Excise Duty rates for cars, vans and motorcycles to increase by RPI from 1 April 2022.
  • Vehicle Excise Duty for HGVs and Levy rates are frozen.
  • New funding announced for lorry park facilities
  • Duty rates for hand-rolling tobacco increasing by 6% over inflation; duty rates for other tobacco products to increase by 2% over inflation.
  • A consultation has been published on reforming alcohol duty.
  • Fuel duty remains frozen.
  • Hospitality and leisure sector to receive a 50% discount from business rates in 2022.
  • Confirmation that legislation will be introduced to take action against those who promote and market tax avoidance schemes.

If you have any questions or would like more information about any of the above please contact me.

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