Budget 2021: Key Announcements

In a Budget full of announcements (although a few major ones were highlighted before the big day, such as the new Health and Social Care levy and the increase in National Minimum Wage/ National Living Wage) we review the key points here.

New announcements with immediate effect

  • 30-day reporting and payment deadline for CGT on UK residential property extended to 60 days for transactions that complete on/after 27 October 2021 (the deadline is similarly extended where non-residents dispose of other UK land and buildings)
  • High Income Child Benefit Charge is to be brought within the discovery assessment regime; this will apply retrospectively
  • Cross-border group relief for corporation tax to be abolished w.e.f. 27 October 2021
  • Increases to various ‘cultural’ tax reliefs (e.g. for theatres and orchestras) from 27 October 2021

New announcements taking effect later

  • 100% Annual Investment Allowance for qualifying plant and machinery – limit to remain at £1 million until 31 March 2023
  • Residential Property Developer Tax to be introduced from 1 April 2022: 4% of profits above £25m that are derived from UK residential property development
  • Car fuel benefit multiplier for 2022/23 is £25,300
  • Van benefit charge for 2022/23 is £3,600 and the van fuel benefit charge is £688
  • National Insurance Contribution (NIC) thresholds for 2022/23 increase by 3.1%, except the Upper Earnings Limit for Class 1 and Upper Profits Threshold for Class 4, which are both frozen
  • R&D tax relief to be reformed from 2022/23, but no details yet confirmed
  • ISA investment limit unchanged for 2022/23 at £20,000 (£9,000 for Junior ISA)
  • Annual Tax on Enveloped Dwellings (ATED) rates rise by 3.1% from April 2022
  • Reform of basis period rules for unincorporated business and LLPs is to proceed (2023/24 will be the transitional year)
  • Temporary reliefs for Business Rates for small businesses in 2022/23, with longer term reform of the system and reliefs for expenditure to be introduced in April 2023
  • Reform of Air Passenger Duty from April 2023: decreases for domestic flights and increases for ‘ultra-long haul’
  • Consultation for fundamental reform of alcohol duties, including incentives for pubs by reducing the duty on draught alcoholic drinks

Confirmation of matters previously announced

  • National Insurance Contributions (NIC) and dividend tax rates to rise by 1.25% from April 2023 to help fund health and social care (NIC rates will return to current rates for 2023/24, when the separate Health and Social Care Levy is introduced)
  • Structures and Buildings Allowance – changes to Allowance Statement requirements
  • ‘Notification of uncertain tax treatments’ will be introduced for large businesses from 1 April 2022, requiring HMRC to be told if they take a tax position in their returns for VAT, corporation tax or income tax (including PAYE) that is uncertain
  • New late submission and payment penalty regimes to be introduced for VAT (for APs beginning on or after 1 April 2022), MTD ITSA from April 2024 and other ITSA taxpayers from 6 April 2025
  • Changes to the ‘Scheme Pays’ reporting deadline from 6 April 2022, where a taxpayer wishes their pension scheme to meet an Annual Allowance tax charge above £2,000
  • Making Tax Digital for Income Tax Self Assessment (MTD ITSA) to be introduced from 2024/25, with an extra year’s delay for general partnerships.
  • Minimum pensions age to access private pensions increases from 55 to 57 from 6 April 2028