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Budget Autumn 2021

UK Budget Highlights – 27th October 2021

Useful Summary of Autumn Budget October 2021

Corporation Tax

The known increase to 25% will be from April 2023, with Diverted Profit tax increasing to 31%.

£1M Annual Investment Allowance for capital spending is now extended to March 2023!

A small profits tax rate of 19% will be reintroduced, but at a lower level of £50,000 of profits with the corporation tax rate tapering back up to 25% for profits of £250,000.  

Research & Development Reliefs

The scope of R&D tax credit relief will be extended to include Cloud computing and Data Costs

Business Rates

50% discount on business rates (up to £110k) for hospitality, retail and leisure businesses.

Alcohol Duty Reforms

End duty premium of on sparkling wines and fruit cider. Lower rate of duty on draught beer and cider – a cut of 5% that will bring the price of a pint down by 3p.

Fuel Duty

He is scrapping the planned rise in fuel duty.

National Living Wage

National Living Wage next year by 6.6% to £9.50 an hour.

Universal Tax Credits

Taper cut by 8% from 63% to 55%. Worth over £2bn.

Air Passenger Tax

APT reduced. Flights between airports in UK will be subject to a new lower rate of air passenger duty from April 2023

More In Detail

Announces ‘real-terms rise’ in spending for every department

The chancellor says total departmental spending will increase by £150bn – “the largest increase this century”. 

It means spending will grow by 3.8% a year. 

He says this will be a “real-terms rise in overall spending for every single department”.

 Healthcare spending to increase by £44bn

By the end of this parliament, healthcare spending will increase by £44bn to £177bn. 

He adds the extra revenue from the previously announced Health and Social Care Levy will go directly to the NHS.

Local government to be given £4.8bn in funding

Authorities will receive the new grant funding over the next three years, the chancellor says. 

Sunak announces more funding for affordable housing

The chancellor commits to a £24bn multi-year housing settlement, saying £11.5bn will go towards building new affordable homes. 

£1.8bn will go towards working on brownfield land, meaning one million more homes can be built. 

Another £5bn will also be spent on removing unsafe cladding from buildings. 

Schools will get “almost £5bn”.

He tells MPs that per pupil funding will be up by around £1,500, which is back “to 2010 levels”.

The government will also give schools an extra £2bn for schools catch up.

As he announces a fund for early-years care including new family hubs, He also announces 30,000 new school places will be created.

UK to recruit 20,000 new police officers

The chancellor is also announcing his allocation for the justice system. 

Some £2.2bn will be spent on the system, including half a billion to reduce the courts backlog. £3.8bn will also go towards building prisons. 

Roads

Over 50 local roads upgrades” and over £5bn for local roads maintenance – including on the repairing of potholes.

There is also funding for buses, cycling and walking totalling more than £5bn.

Allocations for culture and local communities

Some £560m will be spent on youth services while another £200m will build or transform community football pitches, the chancellor says. More than 100 museums and libraries will be renovated and restored, and there will be a new Beatles attraction on Liverpool waterfront.

Research and development investment

The target to increase R&D investment to £22bn will be reached in 2026 to 2027 – two years late.

Hospitality businesses to get 50% discount in business rates

Retaining business rates but will reform them.

The chancellor announces a 50% discount on business rates (up to £110k) for hospitality, retail and leisure businesses.

Business rates will be fairer with a new 3 year revaluation from 2023.

Overhaul of alcohol duty – with price of a pint to fall by 3p

The chancellor announces a five-step plan to overhaul alcohol duty, which he says is currently “outdated, complex and full of historical anomalies”. 

These are…  ·Slashing the number of main duty rates from 15 to six. The stronger the drink, the higher the rate of tax. Mr Sunak says this will “end the era of cheap, high-strength drinks”.  ·New small producer relief. ·End duty premium of on sparkling wines and fruit cider. ·Lower rate of duty on draught beer and cider – a cut of 5% that will bring the price of a pint down by 3p. ·Planned increase of duty on spirits such as Scotch whiskey will be cancelled.

Planned rise in fuel duty cancelled

He is scrapping the planned rise in fuel duty.

National Living Wage

National Living Wage next year by 6.6% to £9.50 an hour. “For a full time worker, that’s a pay rise worth over £1,000,” Sunik says

Universal Tax Credits

Universal Credit taper rate is a hidden tax on work, it will be cut by 8% from 63% to 55%. Worth over £2bn.

The cut will see two million families keeping an average of around £1,000 a year, the chancellor says.

For example, he says a single mother of two renting and working full-time on National Living Wage will be better off by around £1,200. 

Author

victoria sharp

Comments (2)

  1. Dawn Johnson
    27 October 2021

    Excellent, well constructed and informative
    Thank you

  2. Maxx-World.de
    7 January 2022

    Great content! Keep up the good work!

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