Please read our summary of the key announcements in yesterday’s Budget Statement.
Chancellor Rishi Sunak used the Autumn Budget 2021 to outline the government’s plans for post pandemic, post Brexit Britain. Investing taxpayer money in long-term plans will, he believes, secure the economic future of the country. Everything from the NHS, schools, local transport and the culture and leisure sector appear set to benefit from the better-than-expected economic outlook from the Office for Budget Responsibility.
However, immediate changes to improve the finances of households and businesses increasingly worried about rising costs over the next 12 months were thin on the ground.
Some of the highlights were:
• The Chancellor expects to raise £985m from freezing inheritance tax bands, £990m from freezing the pension lifetime allowance, and an extra £65m from freezing the annual exemption on capital gains tax (CGT) in the next five years.
• The personal income tax allowance and the higher rate threshold will not increase as announced in the Spring Budget.
• The rate of tax dividends above the dividend allowance will rise by 1.25%, as announced in September 2021.
• National insurance rates will rise by 1.25% in 2022/23 as announced in the NHS/social care package launched in September 2021.
• A planned rise in fuel duty has been cancelled.
• Effective immediately, the deadline for reporting and paying CGT after selling UK residential property will increase from 30 days to 60 days after completion.
• The annual ISA subscription limit will remain at £20,000 and for Junior ISAs will remain at £9,000.
• The government will legislate in Finance Bill 2021/22 to increase the earliest age at which most pension savers can access their pensions (the normal minimum pension age) from 55 to 57. This increase will take effect from 6 April 2028.
• A 6.6% increase to the national living wage to £9.50 an hour, from 1 April 2022, was confirmed. Young people and apprentices will also see increases in the national minimum wage rates.
How the Chancellor’s plans play out against a backdrop of potentially rising inflation and no let up in the calls on the public purse should make for a lively run up to the new tax year.