Dear Client
We summarise below the key points announced by the Chancellor, Rishi Sunak, in this week’s Budget:-
- National Insurance Contributions set to increase from April 2022, as introduced in The Health and Social Care Levy by Prime Minister, Boris Johnson, in September, and will apply to employees and employers liable for Class 1 NIC and to self-employed individuals liable for Class 4 NIC at the rate of 1.25% for employees and employers.
- Dividend tax for individuals who receive dividend income will increase by 1.25% from April 2022.
- Research & Development Tax Credit reforms from April 2023 to refocus the relief on to UK based businesses.
- National Living Wage set to rise on 1 April 2022 by 6.6% to £9.50 an hour.
- Basis period and Making Tax Digital will be reformed so business profits for a tax year will be the profit or loss arising in the tax year itself, regardless of the accounting date, from 2023-2024.
- Annual Investment Allowance (AIA) limit of £1million of expenditure on qualifying plant and machinery, which was due to end on 31 December 2021, has been extended to 31 March 2023.
- Recovery Loan Scheme, made available to businesses planning their way out of the Covid-19 lockdowns, would be extended until 30 June 2022.
- A new temporary business rates relief in England for eligible retail, hospitality and leisure properties for 2022-2023. Eligible properties will receive 50% relief, up to a £110,000 per business cap.
- From 27 October 2021, the deadline to report and pay CGT after selling UK residential property will increase from 30 days after the completion date to 60 days.
- Future changes to “Net Pay” pension scheme arrangements, which will mean that low earners will benefit from a top-up to their pension.
- Fuel duty rise scrapped for 2022/2023, meaning fuel duty will be held at 57.95 pence per litre.
With the previous announcement that corporation tax is set to increase from April 2023, the freezing of personal tax thresholds and the introduction of the new Health and Social Care Levy, many business owners may breathe a sigh of relief that significant additional tax rises were not announced. The Chancellor was also silent on potential reforms to the tax system, such as capital gains tax, inheritance tax, pension relief and the taxation of work.
Please be assured, once again, that we are only a phone call away, and do not hesitate to contact us if we can be of any assistance.
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