It seems like the usual complaint that so much of the detail of the Autumn Budget 2021 has already been released, but the majority of that is of additional spending, with little on the tax consequences. It seemed the majority of the speech was actually blowing the Tory trumpet over their achievements rather than what will happen going forward. The economic announcements were:

  • 2 worldwide concerns are rising inflation (3.1% in September) due to 2 global forces due to supply chain and energy demand, the government is suspending the HGV levy and excise duty is being extended.  Also various measures to increase the availability of HGV drivers
  • OBR forecast economy will be at pre Covid level by the beginning of the year, unemployment peak 5% not 12% expected, wage growth 3.5%
  • A new charter for public spending to ensure we don’t spend more than is collected in taxes
  • That our fiscal rules will be met, continuing to meet the needs of working families, meet obligations to world’s poorest and return to the previous 0.7% on overseas aid by 24/25, and finally an increase in real terms of spending in all departments
  • School funding per pupil to return to 2010 levels in real terms
  • Investment in museums across the country, extending tax reliefs for culture to March 2024
  • A reminder that it is not the government’s money to spend it is taxpayer’s money
  • Continued investment in infrastructure and also R&D

Tax changes

  • R&D tax relief, we are the 2nd highest spending in OECD, and need to recognise the changes so the scope has now been extended to include cloud computing and data costs
  • Recognising that we have the freedom to do things differently now we have left the EU, the tonnage tax regime will encourage UK registration of vessels and therefore flying of the red ensign
  • Air passenger duty, UK internal flights duty costs reduced and long distance flights increased to recognise the impact on the environment

Business taxes

  • Corporate taxes, £1m Annual investment allowance extended to March 2023 from December 2021
  • 3 changes in business rates to create stronger high streets: more frequent revaluations; to encourage solar and eco activity; and business rates improvement relief offering 12 month extension if a property is improved with no increase in the rates bill
  • In addition the business rates multiplier has been cancelled for next year and there will be a 50% reduction for retail, hospitality and leisure for one year

Duties, fuel and pay

  • A recognition that the alcohol duty system is outdated and complex, so simplification in 5 steps
    • Reduction to 6 rates from 15
    • Craft producers – small producer relief for lower alcohol beers and ciders
    • Reduced rates for sparkling wine and fruit ciders, previously artificially high
    • pubs introducing “draught relief” reduction on the rate for beer and cider sold from the cask by 5%,
    • planned increases in duty already announced have been cancelled
  • Fuel prices – planned rise cancelled
  • Public sector workers pay freeze ends
  • National living wage increase to £9.50ph
  • Aim for taxes to be going down by the end of this Parliament and with this in mind universal credit taper currently 63% for every extra £1 earned, this will be reduced by 8% to 55% taking effect within weeks before 1 Dec 2021 – leaving more of what people earn in their pockets

Other measures already announced or not mentioned

  • The recent announcement of an increase in NI of 1.25% also reflected in dividend tax (increases to 8.75%/33.75%) to fund the health service
  • A change in the basis period for self employed and partnerships delayed from 2023/24 until 2024/25 – this means that anyone with a year end which is not 5 April will end up being taxed on a longer period of account (>12 months) in the transitional year
  • Likewise Making tax digital for self employed and landlords is also being delayed until 2024/25
  • To increase the age at which pension savers can access their pensions without penalty from 55 to 57
  • Capital gains tax on property disposals – to increase the deadline to report and pay the tax from 30 to 60 days, as recommended by the Office of Tax Simplification that this was too short
  • Click for the Rates and Allowances for 2022/23

It seems that the biggest tax hit was that to corporation tax announced earlier in the year but whether that is big enough to repay the debt and fund the promises made remains to be seen. As usual the Autumn Budget 2021 detail will be released over the next few weeks and you should seek professional advice before taking any steps based on these contents. If you would like advice in this or other areas feel free to call. Alastair Wood, AW Accounting, Shrewsbury, Shropshire – Accountants who “speak your language”