AUTUMN BUDGET 2021

This Budget was the first delivered by Rishi Sunak, the Chancellor, that wasn’t dominated by managing the pandemic, although the impact of the coronavirus was still front and centre in the policy decisions taken

Summary

Taxes

The Chancellor announced various changes to taxes, including:

• A freeze on fuel duty in 2022/23, for the twelfth consecutive year.
• A one-year freeze on alcohol duty from February 2022, followed by a reform to alcohol duties.
• Various changes to business rates, including a new, temporary 50% relief for retail, hospitality, and leisure businesses in 2022/23, up to a cap, and a freeze to the business rates multiplier in 2022/23.
• An extension of the temporary higher £1 million level of the annual investment allowance until 31 March 2023. This is a capital tax allowance for certain investments in plant and machinery.
• Changes to air passenger duty, with a new band and lower rates for domestic flights, and a new band and higher rate for travel over 5,500 miles.
• A reduction of the bank surcharge on top of corporation tax from 8% to 3%, from April 2023. The annual allowance on the surcharge will rise to £100m. This follows planned increases in the standard rate of corporation tax, which is rising from 19% to 25% in from 2023/24.

Benefits and wages

Changes to benefits and wages include:

• Changes to Universal Credit (UC) to reduce the amount that is taken away as earnings rise, including a fall in the taper rate for UCfrom 1 December. This means a person’s UC award will be reduced by 55p, rather than 63p, for every £1 of net earnings above any work allowance.
• The National Living Wage for people aged 23 or over will increase from £8.91 to £9.50 an hour from April 2022. There will also be increases to the National Minimum Wage rates for younger people and apprentices.
• An end to the one-year public sector pay freeze.