Autumn 2021 Budget – Summary of noteworthy changes

The Autumn 2021 budget did not give us many surprises.

There were no significant changes to income tax rates. Instead, we were presented with extensions to existing schemes, along with reforms promised for business rates and alcohol duty. 

For detailed analysis, download our guide to the Autumn 2021 budget. Here is our summary of the major announcements.

Tax rates

The main rates for corporation tax and income tax remain unchanged, but are due to increase in April 2023. As previously announced, National Insurance and dividend tax will increase by 1.25% from April next year. Corporation tax is set to increase in 2023.

Other changes to income taxes

R&D tax relief is being expanded to include cloud computing and data costs. The budget brings in a restriction, that from April 2023 only UK R&D will be eligible for tax relief.

For capital purchases, the Super Deduction is set to stay until April 2023 and the Annual Investment Allowance will remain at £1M per year.

Making Tax Digital for Income Tax, which is set to see taxpayers filing tax returns quarterly instead of annually, has been delayed until April 2024.

Rates reform

A reform of rates has been announced. This, combined with a new Online Sales Tax might shake up how much business such as high street shops are paying for their rates. This will take time to implement.

In the meantime, hospitality and leisure businesses are being given a 50% discount on their business rates.

We can also look forward to a new, 3-year cycle of rates reviews. Business rates already seem quite difficult for local government to get right, with many clients receiving multiple demands for the incorrect amount of rates each year. I worry that a 3-year review will only increase the time businesses owners waste trying to sort out incorrect rates bills.

COVID-19 recovery

The COVID-19 Recovery Loan scheme has been extended until 30 June 2022.

Payroll and benefits

The National Living wage will increase to £9.50 per hour from April 2022. This is the rate for over-23s.

The earliest age that pension savers can access their pensions will rise from 55 to 57.

The flat-rate benefit charge for vans is set to increase, as is the multiplier for car and flat-rate for van fuel.

Capital gains tax

From 27 October 2021 the deadline for residents and non-residents to report and pay CGT after selling UK residential property increases from 30 days after the completion date to 60 days. This will be a welcome measure for anyone selling a home, giving them longer to report and pay CGT.

Further information on the Autumn 2021 Budget can be found in our downloadable guide. 

Do get in touch with us if you would like to discuss how these changes will impact you and your business.

Other Insights

VAT on hospitality and setting your prices

The reduced VAT rate of 5% for the hospitality industry is due to end on 30 September 2021. It’s time for businesses to consider how this will impact their trade.

To prepare, we recommend that our clients: review their prices; prepare till systems for the change; save for their VAT bill; constantly monitor their business’ performance.

Read More »

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