2021 Autumn Budget Summary

The Chancellor announced his Budget today. There were concerns over tax rises, but instead we've seen a lot of positive changes. What did Mr Sunak actually say?

Date
27 October 2021
Author
Steven Case Steven Case
Reading time
Around 2 min
Categories
#Budget


Wages 

  • national living wages increased from £8.91 to £9.50 

  • as a reminder, a 1.25% increase in NICS from April 2022

  • as a reminder, personal tax thresholds frozen until 2026


Corporation tax 

  • annual investment allowances (AIA) of up to £1m will be extended to 31 March 2023 when it will drop back down to the planned £200k. This was originally planned for December 2021

  • as a reminder, super deduction in place until April 2023 allowing new capital spend to be considered at 130% in its value in a tax computation

  • as a reminder, corporation tax will return to a two-tier system from April 2023 when:

    • the rate of corporation tax will rise to 25% for companies with profits exceeding £250,000 

    • companies with profits up to £50,000 will continue to pay 19%

    • companies with profits between £50,001 and £250,000 will pay tax at 25% reduced by marginal rate relief rate so that the main rate won’t apply until their profits excess the higher amount

  • increased funding for R&D relief as well as an expanded criteria to include cloud computing and data costs within eligible spend. A shift on focus to spend in the UK only.

VAT

  • as a reminder, VAT will remain at an interim rate of 12.5% until 31 March 2022 for hospitality and tourism businesses

  • as a reminder, VAT registration threshold will remain at £85,000 

Personal tax 

  • as a reminder, personal allowances will then stay the same until April 2026

  • as a reminder, the higher rate tax threshold will also remain the same until April 2026.

  • as a reminder, a 1.25% increase in dividend tax from April 2022

  • as a reminder, personal tax thresholds frozen until 2026

  • universal credit taper cut from 63% to 55% by December 2021 so that people can benefit more

  • CGT deadline extension from 30 to 60 days relating to land and property disposals for UK residents

  • class 2 and 3 NICS for 2022/23 to be increased by 3.1%

Other measures

  • one year business rates discount of 50% for businesses in the retail, hospitality and leisure sectors

  • as a reminder, plastic packaging tax begins from April 2022

  • as a reminder, residential property developer tax from April 2022 at 4%

  • MTD for income tax delayed until April 2024

  • From April 2028, rarliest pension age increases from 55 to 57

  • recovery loan scheme extended to 30 June 2022

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