2021 Autumn Budget

In the run up to today’s Budget, several announcements were trailed by press release, for example the increase in the National Minimum Wage from £8.91 to £9.50 for over 22s and the potential lifting of the public sector pay freeze.

There was the usual speculation about changes to pension tax relief and capital gains tax; however with the £12bn per annum Social Care Levy only having been announced in September, it seemed unlikely that there would be further tax increases. The questions really were: just how bad is the state of public finances; what measures could be taken to maintain the post-Covid recovery; and will interest rates need to rise to prevent inflation taking hold.

In the event, news of the recovering economy was reasonably good, with 6.5% growth pencilled in for 2021 and 6.00% for 2022. Inflation could average 4% next before falling again, so any rise in interest rates is likely to be modest.

The main points of interest were:

  • The taper rate for the withdrawal of Universal Credit is being reduced, so that recipients who are working will be penalised less.
  • There will be a 50% discount in business rates for retail and hospitality businesses for the 2022/23 year
  • The time limit for paying capital gains tax on residential property disposals is increased from 30 days to 60 days
  • The 100% capital allowances annual investment allowance of £1m will remain until 31 March 2023
  • There are some technical changes to R&D tax credit scheme, including extending qualifying expenditure to include cloud and data costs
  • A £1.4bn fund is being established to encourage inward investment in technology, particularly in the electric vehicle and life sciences sectors
  • There are changes to alcohol duties, with some drinks becoming a little more expensive, and others reducing in price. Draught beer duty is being reduced but only on containers of over 40 litres – penalising small independent breweries.

If you would like to discuss any of the above please call your usual contact at Corrigan or email richard.bunker@corrigan.co.uk.

2021 Autumn Budget

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