Autumn Budget 2021 – Key Announcements

In a budget that Rishi Sunak claims sets the stage for a new age of optimism and the foundation of a stronger economy, there are a number of announcements which may be of interest to our clients:

The key announcements for individuals are:

Capital Gains Tax Property Payment Window Extended

Not included in the speech, but an important announcement nonetheless, was a change to property payment window for capital gains tax.

The deadline by which UK residents must report and pay any capital gains tax on the sale of residential property has increased to 60 days after the completion date, up from 30 days.

This takes immediate effect, applying as of 27 October 2021.

Universal Credit Taper Rate Cut

An 8% reduction to the taper rate for Universal Credit. The measure will allow claimants to keep an additional 8p for every £1 they earn.

National Living Wage Increases To £9.50

The national living wage will increase from 1 April 2022, from £8.91 to £9.50 an hour – an increase of 6.6%.

The key announcements for businesses are:

Business Rates Reform

The long-awaited review of business rates included a 50% cut to rates for eligible retail, hospitality and leisure businesses in 2022 to 2023, up to a cap of £110,000. Additionally, the rates multiplier will be frozen for 2022 to 2023.

Other reforms included the introduction of a new investment relief for green technology, an improvement relief for businesses expanding their properties, and a move to three-yearly revaluations from 2023, instead of five years as it stands now.

Annual Investment Allowance Extended

The annual investment allowance will remain at its current level of £1 million until 31 March 2023, instead of ending on 31 December 2021 as planned.

R&D Tax Credit Changes

Although details are yet to be released, there are plans to reform R&D tax reliefs, by including data and cloud costs as qualifying expenditure, as well as refocusing the reliefs on activity in the UK.

Other key announcements included:

• a 50 per cent cut in air passenger duty for flights within the UK from April 2023;
• the cancellation of the planned rise in fuel duty;
• an overhaul of the alcohol excise system;
• up to 300,000 more families will benefit from an extra £200 million investment in the Supporting Families programme;
• £5.9 billion to reduce NHS backlogs;
• an additional £4.7 billion by 2024-25 for the core schools budget in England plus increased funding for special educational needs places, education recovery, adult numeracy skills, apprenticeships and the roll out of “T-Levels” roll out;
• an extra £2.2 billion has been announced for courts, prisons and probation services;
• core science funding will rise to £5.9 billion a year by 2024-25;
• tax reliefs on theatres, orchestras, museums and galleries will — from today until April 2023 — be doubled and won’t return to the normal rate until April 2024;
  – a cladding tax will mean large construction companies will be charged an extra levy to raise a £5 billion fund to remove unsafe cladding from high-rise buildings;
• a confirmed investment of £11.5 billion in the Affordable Homes Programme in England from 2021-26 to help build up to 180,000 new affordable homes;
• £6.9 billion for transport to improve rail, tram, bus and cycle networks in the big city regions and bus services outside London;
• a suspension of the HGV road user levy has been extended until July 31, 2023, and a freeze on vehicle excise duty for heavy goods vehicles in 2022-23;
• spending on overseas aid is scheduled to return to 0.7 per cent of national income in 2024/25 — before the end of the parliament; and
• With the aim of “levelling up”, devolved administrations will be given the “largest block grants” since 1998, with an increase to Scottish government funding in each year by an average of £4.6 billion, £2.5 billion for the Welsh government, and £1.6 billion for the Northern Ireland Executive.