Autumn Budget 2021
Amidst global supply chain shortages and rising prices, Rishi Sunak reaffirmed the government’s commitment to spending on public services and capital investment whilst working to control inflation, in his second Budget of the year.
With the controversial increase to National Insurance Contributions already announced, there were relatively few tax changes announced within the Budget.
We have noted below some points that may be relevant to you.
• The Annual Investment Allowance, which was to revert to £250,000 on 31 December 2021, is to be kept at £1m until 31 March 2023.
• The age at which most people can access their pensions without suffering unauthorised payments tax charges, is set to increase from 55 to 57 from 6 April 2028. There were no major changes to Income Tax relief on pensions savings or the annual and lifetime allowances, which is good news for savers.
• The 30 day period for reporting and paying Capital Gains Tax on UK residential property gains is to be extended to 60 days for disposals completing on or after 27 October 2021. There no major changes to Capital Gains Tax, despite the speculation in advance of today’s announcements.
• Business rates are to be reformed to make the system fairer and with more frequent revaluations. There is a new one year 50% business rates discount for retail, hospitality and leisure sectors, to help those that are still recovering from the impacts of Covid lock downs.
• As previously announced, Making Tax Digital for Income Tax will be delayed for 1 year and will be introduced from 6 April 2024 for individuals and from 6 April 2025 for partnerships.
• As announced in September, National Insurance Contributions will increase by 1.25% from April 2022. The rate of Income Tax on dividends is also set to increase by 1.25% from April 2022. Income Tax on dividends falling within the basic rate tax band will therefore increase to 8.75%, whilst dividends within the higher rate and additional rate tax bands will rise to 33.75% and 39.35%, respectively.
As always, if you would like to discuss how these changes affect you or your business, please do not hesitate to contact us.
Victoria Paley ACA CTA
Senior Tax Manager
Victoria joined the practice in July 2019 having worked in accountancy and tax in the rural sector since 2010. As a Chartered Accountant and Chartered Tax Adviser Victoria spends most of her time advising family farming businesses on Capital Gains Tax and Inheritance Tax matters primarily in relation to succession planning and capital transactions.
When Victoria isn't working she enjoys being outside with her dog or riding her horse. She also loves to travel and try and make the most of holidays having been to India, Cuba, South America and South East Asia over the last few years. However this is soon to be put on hold as Victoria is expecting her first child in 2021!