Autumn Budget 2021 proved to be a pleasant surprise for many, as Chancellor Rishi Sunak resisted the temptation to raise taxes to start clawing back to the UK’s huge COVID-19 debt.
The two main taxes that the Chancellor could have realistically tweaked – capital gains tax and inheritance tax – were left well alone in his speech on 27 October 2021.
In fact, there was actually some good news for owners of additional residential property along with a welcome boost for the lowest earners on Universal Credit and drinkers.
In this blog post, we will break the Autumn Budget speech down into what it means for landlords, employers, businesses in the hardest-hit sectors, and everyone’s personal finances.
Before Autumn Budget 2021, people who owned additional residential properties had 30 days to report and pay any capital gains tax arising on completion of disposals.
The time limit to report and pay capital gains tax on the disposal of UK residential property has doubled from 30 days to 60 days, applying on completion of sales made on or after 27 October 2021.
This applies to both UK and non-UK residents.
Where a gain arises from a mixed-use property, only the portion of the gain that is residential property should be reported and paid. This measure is only available to UK residents.
For bricks-and-mortar businesses
Arguably the biggest headline-grabbing measure in Sunak’s speech surrounded business rates in England, providing much-needed relief for the firms with premises in the hardest-hit sectors.
Firstly, the business rates multiplier will be frozen for 12 months from 1 April 2022 until 31 March 2023, keeping the multipliers at 49.9p and 51.2p. This is usually linked to the September rate of inflation, as measured by the Consumer Prices Index, and means they avoid a 3.1% increase in this tax.
At the same time, a new temporary business rates relief for eligible retail, hospitality and leisure properties will offer 50% relief, subject to a cap of up to £110,000 per business, in the 2022/23 tax year.
Finally, the frequency of business rates revaluations will increase in 2023, so they take place every three years instead of every five. That should ensure this business tax better reflects changing economic conditions.
If you employ any members of staff who are over the age of 23, you will need to increase their hourly pay to at least £9.50 from 1 April 2022.
This has the potential to bring more over-23s into workplace pensions. While that’s a good thing for them, it will mean you have to make contributions of at least 3% if they earn more than £10,000 a year.
For workers who are under-23, minimum wages for other age ranges will increase as follows:
- 21 to 22-year-olds: from £8.36 to £9.18 an hour
- 18 to 20-year-olds: from £6.56 to £6.83 an hour
- 16 to 17-year-olds: from £4.62 to £4.81 an hour
- Apprentices: from £4.30 to £4.81 an hour.
Get in touch
To discuss any of these changes and how they might affect you, email firstname.lastname@example.org or call 01454 619900.