Budget October 2021

On 27^th October 2021 Chancellor Rishi Sunak delivered the Autumn 2021 budget. Whilst this budget was more focussed on spending, there are a few key points from this budget and previously announced tax rises.

The Health and Social Care Levy:

• A levy of 1.25% will be added to Class 1 (employers and employees) and Class 4 National Insurance contributions. This levy will apply from April 2022.

Personal tax rates on dividends:

• Tax rates payable on dividend income will increase by 1.25% from April 2022. The rates will therefore be 8.25% for basic rate taxpayers, 33.75% for higher rate taxpayers and 39.35% for additional rate taxpayers.
• The first £2,000 of dividend income is still tax free.

Business rates:

• Businesses in the retail, leisure and hospitality sector will receive a 50% reduction on business rates up to a £110,000 cap.

National living wage:

• From April 2022 the National Living wage rates will increase as follows:
  • For people aged 23 or over – £9.50 per hour
  • For people aged 21 or 22 – £9.18
  • For people aged 18 – 20 – £6.83
  • For people aged 16 or 17 and the apprenticeship rate – £4.81

Reporting of Capital Gains on residential property:

• The 30 day time limit for reporting and paying capital gains on the sale of residential property has been increased to 60 days.
• This was effective from 27 October 2021, meaning any sales that were completed on or after 27 October now have 60 days to report the gain and pay the capital gains tax.