UK Autumn Budget 2021 | The Highlights

Analysis and commentary from FPM’s team of tax experts, identifying the key changes and outlining the practical implications for you and your business.

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Chancellor Rishi Sunak presented his UK Autumn Budget and Annual Spending Review on Wednesday 27th October 2021.

One of the key factors outlined by Mr Sunak was that the Office for Budget Responsibility has lifted the economic growth forecast figures for this year to reach 6.5% – higher than expected. Therefore, the announcements do not deliver the radical changes predicted by many commentators. A summary of the key points is laid out below.

Income Tax, NIC’s, Claims and Reliefs

Key Highlights

• Payments made through the Household Support Fund and similar schemes in the devolved administrations are to be exempt from Income Tax.
• The NIC’s upper earnings limit and upper profits limit are to be maintained at 2021-22 levels.
• Income Tax bands and personal allowances including the marriage and savings allowances remain at 2021-22 levels.
• Small increase to the blind person’s allowance
• From 6 April 2022: a temporary 1.25% increase to NIC’s.
• From 6 April 2023: a new Health and Social care levy of 1.25%.

Employers

Key Highlights

• National living wage to increase to £9.50 per hour.
• Van benefit and fuel benefit charges to increase in line with inflation.
• Legislative amendments will be made to update the official vehicle approval documentation recognised for determining the level of a vehicle’s CO2 emissions.

Savings & Dividends

Key Highlights

• ISA, Junior ISA and child trust funds limits remain at £20,000, £9,000 and £9,000.
• The starting rate for savings income limit remains at £5,000.
• From 6 April 2022, an increase in dividend tax rates of 1.25%.

Capital Gains Tax (CGT)

Key Highlights

• The 30-day reporting and payment deadline for disposals of UK residential property is extended to 60 days.

Inheritance Tax

Key Highlights

• All rates, allowances, reliefs and exemptions remain unchanged
• The nil rate band is frozen until 2026 at £325,000 by Finance Act 2021.

Land and Property

Key Highlights

• The Annual Tax on Enveloped Dwellings (ATED) will rise by 3.1% in line with inflation for the April 2022-23 chargeable period.
• The rate of the new Residential Property Developer Tax announced in May 2021 is set at 4% and applies to profits exceeding £25 million.
• No changes to Stamp Duty Land Tax (SDLT) rates.

Corporation Tax (CT)

Key Highlights

From April 2023:

• There will be an increase in the rate of CT from 19% to 25% for companies with profits in excess of £250k
• Small profits rate of 19% will exist for companies with profits of £50k or less

R&D Tax Relief

Key Highlights

From April 2023:

• The scope of the relief is to be expanded to include cloud computing and data costs.
• Other reforms to refocus support towards innovation in the UK and to target abuse and improve compliance.

The following points have already been announced and they will become more significant as time progresses:

• Making Tax Digital (MTD) for income tax delayed until April 2024.
• Finance Bill 22 to include provisions to simplify the basis period rules for the self-employed and partners from April 2024.
• A new requirement for large businesses to notify HMRC when they take a tax position in their returns for VAT, Corporation Tax, or Income Tax (including PAYE) that is uncertain.