Autumn 2021 Budget
On 27th October 2021, Rishi Sunak announced the Autumn 2021 budget as Chancellor of Exchequer to Parliament. Read some of the key points here.Get an instant quote
Upon delivering details of the Autumn 2021 budget, Mr Sunak emphasised it was focused on a “post-Covid era.” The Chancellor mentioned this budget would set the economy for “stronger growth, public finances and employment, whilst giving people the support they need with the cost of living levelling up.”
Let's discuss some of the key takeaways from the latest budget:
National Insurance contributions to increase
An increase in National Insurance contributions, by 1.25 percentage points, was first announced in September 2021 by our Prime Minister, Boris Johnson. It will be introduced in April 2022 and will affect employees and employers alike, as well as those classed as self-employed.
Lets see how this looks in monetary terms:
If you are a basic rate taxpayer earning £25k per annum, you'll be expected to pay an additional £152/year.
If you’re a higher rate taxpayer earning £80k per annum, you’ll be expected to pay an additional £840/year.
It is worth noting that employers are subject to the 1.25 percentage points additional tax too and are required to pay this increase from April 2022 onwards.
National living wage set to rise
The Chancellor emphasised the importance of keeping up with the increases in cost of living, so the introduction of an increase in the national living wage is no surprise. Below are the increased rates effective from April 2022:
Rate from April 2022
Current Rate (April 2021 - March 2022)
National Living wage
21-22 Year old rate
18-20 Year old rate
16-17 Year old rate
Business Rates reformed
Details of changes to business rates were provided by the treasury following an 18-month consultation. Rishi Sunak announced the multiplier for calculating business rates will be frozen for 2022 and 2023, saving businesses a total of £4.6bn over the next 5 years.
The timing of revaluations has also changed, meaning revaluations will be every 3 years whereas they were previously 5 years. This will be particularly welcoming for those on the High Street who can argue the rates were not reflective of their declining popularity.
The Chancellor also announced extensions to business rates reliefs for eligible retail, hospitality and leisure businesses for 2022-23. This will provide a reduction of 50% for eligible properties up to £110k.
Capital Gains Tax (CGT) payment window extended
In the past we have heard various complaints about the short deadlines to report and pay Capital Gains Tax. Fortunately, the Chancellor has listened and the deadline has increased from 30 days to 60 days post completion to report and pay any owing tax.
This will be particularly welcoming for non-UK residents who would have previously struggled to file their tax returns in the short deadline.
Rise in fuel duty scrapped for 2022/2023
Fuel duty will be held at 57.95 pence per litre. There was a planned 2.8p increase expected but this was axed, meaning the Treasury have been holding fuel duty for the last 12 years. With petrol prices hitting record highs this will come as little surprise to most.
The freeze is worth a whopping £7.85bn over the next five years to Treasury, and according to the Chancellor and it is expected to save the average UK car driver £1,900.
If you have been impacted by any of these changes and would like to discuss how these changes affect you or your business please get in touch.