Chancellor Rishi Sunak used the Autumn Budget 2021 to outline the government’s plans for post pandemic, post Brexit Britain. Investing taxpayer money in long-term plans will, he believes, secure the economic future of the country. Everything from the NHS, schools, local transport and the culture and leisure sector appear set to benefit from the better-than-expected economic outlook from the Office for Budget Responsibility.
But 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.
Some of the key points include:
- A warning for asset holders 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.
- Retail, hospitality and leisure will be eligible for a temporary £1.7 billion of business rates relief next year. The business rates multiplier will be frozen for 2022/23 so bills are 3% lower than without the freeze. From 2023, no business will face higher rates bills for 12 months after making qualifying improvements to an occupied property. In Wales, all businesses and charities in the leisure and hospitality sectors are already receiving a 100% discount as a result of the pandemic. Further decisions will be made in the Welsh Budget this December.
- A 6.6% increase to 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.
- A new domestic air passenger duty band will cover flights within the UK with a rate of £6.50 for 2023/24. There will be a new ultra-long-haul band, covering destinations with capitals located more than 5,500 miles from London, with an economy rate of £91.
- The temporary £1 million level of the annual investment allowance will be extended to
31 March 2023.
If you have any questions about the summary’s contents or how any aspects of your tax and financial planning may be affected by the Budget, please call us to discuss them.