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Budget response

Autumn Budget on a page

Here's a quick summary of the key measures announced in the Chancellor's 2021 Autumn Budget:

Individuals
  • As previously announced, there will be an increase in National Insurance Contributions from 6 April 2022 by 1.25% under the new Health and Social Care levy, to be spent on the NHS and social care in the UK. This applies to Class 1, Class 4, and secondary Class 1, 1A and 1B
  • The taper relief applying to Universal Credit will reduce from 63% to 55% by 1 December 2021 and there will be a £500 per year increase in the Work Allowances for Universal Credit by the same date
  • As previously announced, the rates of income tax applicable to dividends will increase by 1.25% from 6 April 2022
  • The band of savings income that is subject to the 0% starting tax rate will remain at £5,000 for 2022/23
  • The adult ISA annual subscription limit will remain unchanged at £20,000 for 2022/23
  • The junior ISA and Child Trust Funds annual subscription limits will remain unchanged at £9,000 for 2022/23
  • National Insurance limits and thresholds, as well as Class 2 and 3 National Insurance Contributions will increase by 3.1% for 2022/23. This excludes the Upper Earnings Limit and Upper Profits Limit which will be maintained at 2021/22 levels
  • As previously announced, new penalties for the late submission and late payment of tax for Income Tax Self-Assessment (ITSA) will now come into effect from 6 April 2024 for taxpayers required to submit quarterly updates through Making Tax Digital (MTD). The effective date will be 6 April 2025 for all other ITSA taxpayers
  • As previously announced, MTD for ITSA will be delayed by one year, and will now be introduced from 6 April 2024
  • Income tax basis periods will be reformed from 6 April 2024, with transitional rules from 6 April 2023, so businesses’ profit or loss for a tax year will be that arising in the year itself, regardless of its accounting date
Businesses
  • From 1 April 2023, Research and Development (R&D) tax reliefs will be reformed to expand qualifying expenditure to include data and cloud costs and to focus support on innovation in the United Kingdom
  • The temporary £1 million level of Annual Investment Allowance will be extended until 31 March 2023
  • Cross border group relief and other related loss reliefs will be abolished from 27 October 2021
  • Recovery loan scheme extended until 30 June 2022, with finance of up to £2 million per business available but the government guarantee will reduce from 80% to 70%
  • From 1 April 2022 until 31 March 2023, the business rates multiplier has been frozen at 49.9p and 51.2p. For the same dates, a new 50% business rates relief will apply for eligible businesses in the retail, hospitality, and leisure sectors in England, up to a £110,000 cap per business
  • A new 100% business rates improvement relief will apply from 1 April 2023, so businesses will not face higher business rate bills for 12 months after making qualifying improvements to the property they occupy
  • Beginning in 2023, the frequency of business rates valuations is increased to every three years instead of every five years
  • From 1 April 2023 until 31 March 2035, targeted business rate exemptions will be available for eligible green technology
  • The Museums, Galleries and Exhibition Tax Relief (MGETR) will be extended for two years to 31 March 2024
  • From 27 October 2021, the headline rates of tax relief for the MGETR, Orchestra Tax Relief (OTR) and Theatre Tax Relief (TTR) will be increased. OTT and TTR will return to their previous levels on 1 April 2024 whereas MGETR will expire from this date
  • The bank corporation tax surcharge will be set at 3% from April 2023
  • A new framework is being introduced to the Asset Holding Companies (AHC) tax regime and targeted changes are also being made to the tax rules for Real Estate Investment Trusts (REITs)
Employers
  • From 1 April 2022, the National Living Wage will increase from £8.91 per hour to £9.50 per hour for those aged 23 and over
  • From 1 April 2022, National Minimum Wage will also be increased for younger workers to £9.18 per hour for workers aged 21-22 years old, £6.83 per hour to workers aged 18-20 years old and £4.81 for workers under 18 years old and for apprentices
  • As previously announced, there will be an increase in National Insurance Contributions from 6 April 2022 by 1.25% under the new Health and Social Care levy, to be spent on the NHS and social care in the UK. This applies to Class 1, Class 4, and secondary Class 1, 1A and 1B
  • National Insurance limits and thresholds, as well as Class 2 and 3 National Insurance Contributions will increase by 3.1% for 2022/23. This excludes the Upper Earnings Limit and Upper Profits Limit which will be maintained at 2021/22 levels
Property
  • As previously announced, from April 2022 the Residential Property Developers Tax (RPDT) will be charged at 4% on profits in excess of a £25 million annual allowance that companies derive from UK residential property development
  • From 27 October 2021, the deadline for residents and non-UK residents to report and pay capital gains tax after selling UK residential property will increase from 30 to 60 days after completion
  • From 1 April 2022, the Annual Tax on Enveloped Dwellings annual charges will increase by 3.1%
Other
  • Alcohol duty will be frozen for one year from February 2022
  • The alcohol duty system will be reformed and simplified, with drinks taxed in proportion to their alcohol content
  • Fuel duty will be frozen for 2022/23
  • From 1 April 2023, a new domestic band for Air Passenger Duty will be introduced, covering flights between airports within the UK. The rates will be £6.50 for economy and £13 for other classes
  • From 1 April 2023 there will also be the introduction of a new ultra-long-haul band of Air Passenger Duty, covering flights of 5,500 miles or more from London, with the economy rate set at £91 and £200 for those travelling in other classes
  • The UK’s Tonnage Tax regime will be reformed from 1 April 2022, with changes including a reduction in the lock in period from 10 years to 8 years
Consultations
  • Online sales tax consultation to begin shortly. If introduced, the revenue would be used to reduce business rates for retailers in England
  • The government has launched a consultation on the re-domiciliation of companies.
  • An Alcohol Duty Reform consultation will soon be published, building on the findings of the previous call for evidence held in Autumn 2020
  • The government will launch a consultation on options to simplify the VAT treatment of fund management fees in the coming months
  • A consultation will be launched on the best ways to implement the new improvement relief for business rates
  • The government has announced it will consult before the end of 2021 on further changes to the regulatory charge cap for defined contribution auto-enrolment pension schemes

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