AUTUMN 2021 BUDGET ANNOUNCEMENTS
From 6 April 2022, National insurance rates are increasing by 1.25% for employees, employers and the self employed.
The dividend tax rates will be increased in line by 1.25%. The basic rate dividend tax will increase to 8.75%, the higher rate dividend tax will increase to 33.75% and the additional rate dividend tax will increase to 39.35%. No increases or changes to the main or savings income tax rates.
No increases to capital gains tax and inheritance tax rates or allowances. No changes to reliefs, including business property relief.
The 30 day time limit for reporting capital gains on the sale of residential property and for payment of the tax has been increased to 60 days from Budget day.
The income tax limits and personal allowance will remain at their current level until April 2026. The stamp duty nil rate band for property purchases reverted to £125,000 from 1 October 2021. National Living Wage will increase to £9.50 an hour from 6 April 2022.
There are no changes to the tax relief for pension contributions and the ISA subscription limit remains at £20,000. The earliest age at which most pension savers can access their pensions without incurring an unauthorised payments tax charge will increase from 55 to 57 from 6 April 2028.
The main rate of corporation tax will remain at 19% until April 2023. From this date the main rate will increase to 25%, with a Small Profits Rate of 19% for profits not exceeding £50,000. There will be a sliding scale of tax rates for profits between £50,000 and £250,000 (these thresholds are proportionately reduced for the number of associated companies).
Between 1 April 2021 and 31 March 2023 expenditure on new plant and machinery qualifies for a 130% super-deduction.
Electric company cars will continue to benefit from significant tax breaks with a benefit in kind tax rate of just 2% for 3 years from 6 April 2022
From April 2023, Research & Development (R&D) Tax Relief will be extended to include data and cloud accounting costs. Plans to target abuse and improve compliance will be published later in the Autumn.
VAT registration threshold will remain at £85,000 until 31 March 2024.
There will be a 50% business rate discount for companies in the retail, hospitality and leisure sectors, up to a maximum of £110,000 for 2022/23.
Content kindly provided by Applewood LLP. This guidance outlines some of the important tax changes that may affect you both from yesterday’s budget and the budget from last year and are for general consideration only. This is based on the proposals put forward by the Chancellor in his Budget speech and may change during the passage of the Finance Bill through Parliament. It is not designed to be comprehensive so please do contact us if you have any queries.