Rishi Sunak has today unveiled the Autumn 2021 Budget and all of the changes it will bring.
We have summarised the key changes for you below.
New rates from April 2022 as follows:
- National Living Wage to increase by 59p, to £9.50 an hour.
- 21-22 year old rate to increase by 82p, to £9.18 an hour.
- 18-20 year old rate to increase by 27p, to £6.83 an hour.
- 16-17 year old rate to increase by 19p, to £4.81 an hour.
- Apprentice rate to increase by 51p, to £4.81 an hour.
Taper rate to be reduced from 63% to 55%, meaning that those working and claiming universal credit will take home more money each month. This will be implemented no later than 1st December 2021.
Universal credit encompasses the benefits previously known as; Income Support, Jobseekers Allowance, Employment and Support Allowance, Housing Benefit, Child Tax Credit and Working Tax Credit.
The planned fuel duty rise has been cancelled in light of the current high fuel prices. This duty will be frozen for the twelfth consecutive year.
Alcohol is now to be taxed based on its strength from February 2023. Duty on draft beer and prosecco has been cut, whilst rates on wine with alcohol content above 11% have increased. A freeze on the proposed alcohol duty rates will come into force at midnight on 28th October 2021.
Domestic air travel duty rates are to be reduced, and a higher tier duty is to be introduced for long haul flights covering over 5,500 miles.
Business Rates Relief
The proposed increase in business rates from next year has been cancelled.
A one year 50% discount for English businesses in the retail, hospitality and leisure sectors has also been announced. It has not yet been confirmed whether the Welsh Government will mirror this proposal.
Health & Social Levy
As previously announced, national insurance rates are to increase by 1.25% in order to support the NHS.
Similarly, there is going to be an increase in dividend tax of 1.25%, increasing the basic, higher and additional rates to 8.75%, 33.75% and 39.5% respectively.
This is proposed as a temporary increase, only for the duration of the 2022 to 2023 tax year, and rates will return to normal from April 2023.
Capital Gains Tax
A welcome announcement was that the 30 day deadline on reporting and paying capital gains tax on UK residential property has been increased to 60 days. This is effective immediately for disposals made after 27th October 2021.
The capital gains tax rates and allowances have remained frozen.
- A 4% tax has been announced for property developers with profits exceeding £25 million.
- Benefit in kind charges for vans and for fuel are set to increase in line with CPI.
- Tobacco duties are to rise immediately at RPI + 2%, and hand rolling tobacco by RPI + 6%.
- Making tax digital for Income Tax postponed until April 2024.
- There will be R&D tax credit reforms, to more effectively target UK businesses and increase the scope of the relief to include cloud and data developments.
If there is anything above that you are unsure of, or would like to discuss with us in more detail, please get in touch.