Autumn Budget 2021
1st November, 2021
Autumn Budget 2021 – our key points
Headline measures from The Chancellor
- Extension of the £1million Annual Investment Allowance to March 2023
- Accounting periods for self-employed and partnerships are to be aligned with the tax year and only profits arising in that tax year will be taxed, not the profits arising in the accounting period. This also means that overlap profits from earlier periods will be deductible. These measures will come fully into force for 2024/25, with 2023/24 being the transitional year
- Business rates discount of 50% for the retail, hospitality and leisure sectors for 2022/23 up to £110,000
- There will be a consultation in relation to an online sales tax, usually a forerunner to implementation of a new tax or a substantial reform
- Residential Property Developer Tax of 4% on developers with profits in excess of £25m
- Museum and gallery tax relief extended for 2 years – to March 2024.
- Frozen personal allowances and income tax rate bands
- Confirmation that the 3 dividend tax rates will increase by 1.25% for 2022/23
- Taxable car and van benefits to rise by Consumer Price Index
- National Living Wage to increase to £9.50 per hour
- Change in the calculation of Universal Credits to allow claimants to keep more of the payment
- The minimum pension age is increasing from 55 to 57 from 6 April 2028.
- Cancellation of a planned rise in fuel duties
- Cancellation of planned rise in alcoholic drinks duties
- Lower alcoholic drinks duties to fall
- Reduction of Air Passenger Duty for UK internal flights from April 2023.
- A whole raft of additional funding measures to the tune of £150bn, including a significant boost to the housing sector.
In summary, although there was an official acknowledgement that inflation is on the rise, we found there was very little in the Autumn Budget designed to tackle that issue. In fact, it was quite the opposite. Here is a link to the full Autumn Budget and Spending Review 2021.
Written by Terry Smith, Partner, Tax Department