2021 UK Autumn Budget Summary

 

 

 

2021 UK Autumn Budget Summary

 

The 2021 UK Autumn Budget was delivered by the Chancellor Rishi Sunak on the 27th October 2021. The budget sets out a path for the recovery of the UK economy as we emerge from the Coronavirus Pandemic.

The UK budget today should be seen as a positive for all and for NI residents as an additional £1.6 billion per year on top of the annual baseline funding of £13.4 billion has been allocated to the NI executive. This gives Northern Ireland an extra £120 per head compared to the extra £100 per head for the rest of the UK.

Capital Gains Tax hikes were expected to be announced, however, we can see that the UK government is relying on the growing economy to replenish the funds used to help businesses get through the Covid-19 pandemic.

A note to be made is that £55 million has been allocated to HMRC to aid them in investigating fraud in regards to wrongly claimed Covid-19 grants. Further money has been allocated to HMRC to investigate taxes in general.

Despite the positive outlook on the economy, economic growth and minimal tax hikes, inflation is predicted to rise to an average of 4% for the 2022/23 tax year

 

Individual:

  • The National Living Wage will rise to £9.50 an hour, up from its current level of £8.91. This is a 6.6% rise, or an increase of £1,000 per annum for a full-time worker.
  • No changes to the tax rate bands have been announced.
  • No changes to pension contribution allowances.
  • The Universal Credit taper rate, which calculated the amount of benefit that will be taken away for every £1 earned above the claimants work allowance will be cut by 8% no later than 1 December, bringing it down from 63% to 55%. Mr Sunak claimed it would save almost 2m families on average an extra £1,000 per year.
  • Health & Social Care Levy: As previously announced, there will be a 1.25% increase to both the main and additional rates of Class 1, Class 1A, Class 1B and Class 4 National Insurance contributions for the 2022/23 tax year and all revenue raised will go directly to support the NHS and equivalent bodies across the UK.
  • Capital Gains Tax – No changes to rates, however, the requirement to report and pay capital gains tax on disposal of residential property has been extended from 30 days to 60 days from today.
  • The continuation of the Turing Scheme for the next three years, including £110 million for the Academic Year 2022/23, enabling students from Northern Ireland to go on life-changing placements and exchanges overseas.

 

Corporate:

  • £1m annual investment allowance was extended to March 2023.
  • As previously announced, the Corporation Tax rate to increase to 25% from 1st April 2023.
  • An extra £22billion allocated to R&D tax credits to help encourage investment in cloud computing and data costs. He added he will look at ensuring investment from the tax break is spent in the UK rather than overseas.
  • £1.4 billion allocated for the Global Britain Investment Fund which will help spread economic opportunities more evenly across the UK by supporting investment in the UK’s life sciences, offshore wind and automotive manufacturing sectors.
  • Health & Social Care Levy: as announced a few weeks ago, there will be a 1.25% increase in taxes on dividend income for the 2022/23 tax year, before returning to original 2021/22 levels in the following year.

 

Businesses:

  • Planned rise in fuel duty will be cancelled due to highest pump prices seen in 8 years.
  • Domestic flights between airports in the UK nations will be subject to a new lower rate of Air Passenger Duty from April 2023. This will help reduce the cost of living and bring more people together, as well as improve business opportunities in NI.
  • £1 billion allocated to farmers and land managers and £9.3 million to support fisheries.
  • A 4% levy will be placed on property developers with profits over £25million rate to help create a £5 billion fund to remove unsafe cladding from high rise buildings.

 

Levelling Up Fund:

The Levelling Up Fund has the concept of levelling up the NI economy with the rest of the UK. £49 million in total has been allocated, with 11 projects from the first tranche of allocations from the Fund being the following:

  • Providing new and upgraded sports facilities in Castlederg.
  • Regenerating Omagh Health Centre.
  • Upgrading the electric vehicle charging network across Northern Ireland.
  • The redevelopment of a derelict Ministry of Defence site in Derry/Londonderry into an urban community farm.
  • Creating a new bioscience research centre at Ulster University.
  • Redeveloping Portrush Recreation Grounds.
  • Redeveloping the Dundonald International Ice Bowl.
  • Replacing a former police station in Glengormley with a new business hub.
  • Extending Antrim’s boardwalk into the town centre.
  • Regenerating Daisyfield Community Sports Hub.
  • Extending cycle routes across the Belfast City Region.

 

Other:

  • A new, lower rate of duty on draught beer and cider will cut the price of a pint by 3p.
  • New simplified system for alcohol duties – “The stronger the drink, the higher the rate,” he said.
  • Tax relief for museums and galleries will be extended for two years, to March 2024.
  • The new Scale-Up Visa system will make it quicker and easier for fast growing businesses to bring in highly skilled individuals, and attract the best global talent, particularly in the science and technology sectors.
  • Establishing a new trade and investment hub in Belfast, which will ensure the benefits of the UK’s global trade policy are channelled to Northern Ireland.
  • A UK-wide Adult Numeracy Programme ‘Multiply’ will be set-up to help improve basic maths skills among adults.
  • A new ultra-long haul band in Air Passenger Duty for flights of over 5,500 miles will be introduced from April 2023.

 

 

 

 

https://www.abacni.co.uk/category/articles/