The Chancellor of the Exchequer used the Autumn Budget 2021 to outline the government’s plans for post pandemic, post Brexit Britain. Rishi Sunak believes that investing taxpayer money in long-term projects secures the economic future of the country. Everything from the NHS, schools, local transport and the culture and leisure sectors appear set to benefit from the better than expected economic outlook forecast by the Office for Budget Responsibility.
However immediate changes to improve the finances of households and businesses increasingly worried about rising costs over the next 12 months were thin on the ground and as we all very aware, spending plans must be paid for. Accordingly a selection of the highlights from the first Autumn Budget in three years were as follows:
• The rate of dividend tax will rise by 1.25% from 6 April 2022 therefore the basic rate will now be set at 8.75%, the higher rate at 33.75% and the additional dividend rate at 39.35%;
• National insurance rates will also increase by 1.25% from 6 April 2022 as previously detailed in the NHS/social care package announced last month;
• The Corporation Tax rate increase to 25% from 1 April 2023 was confirmed again yesterday which is also the date that the new 130% Super Deduction allowance for new fixed asset purchases is due to expire;
• There is a warning for owners of assets as the Chancellor expects to raise £985m from freezing inheritance tax bands, £990m from freezing the pension lifetime allowance, and an extra £65m from freezing the annual exemption on Capital Gains Tax (CGT) in the next five years;
• Effective immediately, the deadline for reporting and paying CGT after selling UK residential property will increase from 30 days to 60 days after completion of the transaction;
• The Retail, hospitality and leisure sectors will be eligible for a temporary business rates relief of £1.7 billion next year. Also the business rates multiplier will be frozen for 2022/23 resulting in bills being 3% lower than without the freeze. Also, from 2023, no business will face higher rates bills for 12 months after making qualifying improvements to an occupied property;
• A 6.6% increase in the national living wage to £9.50 an hour, from 1 April 2022, was confirmed. Young people and apprentices will also see increases in the national minimum wage rates;
• Alcohol duty will be restructured so that all beverages will be taxed in direct proportion to their alcohol content. In addition a planned rise in fuel duty has been cancelled;
• The temporary £1 million level of the annual investment allowance will be extended to 31 March 2023.