Autumn Budget - October 2021

Published Thursday, 28th October 2021

The chancellor of the exchequer, Rishi Sunak, delivered his Autumn 2021 budget yesterday afternoon. We have summarised the key announcements below.

We will consider how this impacts all our clients on an individual basis over the coming weeks. If you have any immediate questions, then please do get in touch.

Businesses

  • R&D relief will be limited to work undertaken in the UK from April 2023 but the scope of relief will be expanded to include cloud computing and data costs.
  • The temporary increase in the Annual Investment Allowance (AIA) to £1m is to be extended to 31 March 2023.
  • The increase in the corporation tax rate to 25% for businesses with profits of £250k or greater from April 2023 was re-confirmed.
  • The Recovery Loan Scheme has been extended until 30th June 2022.
  • Creative tax reliefs for theatres, orchestras, museums and galleries doubled until April 2023, with rates reducing to current levels by 2024.
  • A new Residential Property Developer Tax (RPDT) will come in from April 2022 on the profits that businesses derive from UK residential property development to contribute for building safety remediation. The tax will be charged at 4% on profits exceeding an annual allowance of £25 million.
  • A new Scale-Up Visa will launch in Spring 2022 which aims at making it quicker and easier for fast growing businesses to bring in highly skilled individuals.

Businesses Rates

  • Starting in 2023, business rates revaluations will take place every three years instead of five whilst the planned increase in the rates multiplier has been frozen for 2022/23.
  • There will also be a new 100% investment relief for green technology and 100% improvement relief for improvements which increase a property’s rateable value.
  • An additional 50% discount for 2022 will be available to businesses in the hospitality and leisure sector.

Individuals

  • The National Living wage will rise from £8.91 to £9.50 per hour from April 2022.
  • The universal credit taper will be cut by 8% by 1 December 2021.
  • From 6 April 2024, Income tax basis periods will be changed for the self-employed and partners so that a business’s profit or loss for a tax year is the profit or loss arising in the tax year itself, regardless of its accounting date.
  • From 27 October 2021, the deadline for residents to report and pay capital gains tax after selling UK residential property will increase from 30 days after the completion date to 60 days.
  • From 6 April 2022, the rates of income tax applicable to dividend income will increase by 1.25%. This means the dividend ordinary rate will be set at 8.75%, the dividend upper rate at 33.75% and the additional rate at 39.35%.
  • The social care levy of 1.25% will be added to the main and additional rates of Class 1, Class 1A, Class 1B and Class 4 National Insurance contributions from 6 April 2022.

Other

  • UK Alcohol Duty has been simplified with the number of rates cut from fifteen to six.
  • A new Draft Relief lowers the rate of duty on draft beer and cider for community pubs whilst the surcharge on sparkling wines will be abolished.
  • The planned increases in duty on spirits such as Scotch whisky, wine, cider and beer have been cancelled.
  • The planned rise in fuel duty for 2022/23 has been cancelled.
  • Air passenger duty will be reduced for internal UK flights from April 2023 whilst an additional rate will apply to long-haul flights.
  • Shipping tonnage tax will be reformed to reward companies for adopting the UK shipping flag.

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