The Chancellor Rishi Sunak’s Autumn Budget and Spending Review has been making headlines this week.

Much of the content of the financial statement – unveiled on Wednesday 27 October – had already been made public through a series of leaks. But despite this, there were a few surprises on the day.

Here, we give you an overview of some of the tax measures in the Budget – the Chancellor’s second one this year – and share our verdict on the announcements.

The key tax measures that might affect you:

  • Fuel duty to be frozen across the UK for the 12th year running
  • The alcohol duty system to be overhauled, with drinks taxed in proportion to their alcohol content, so stronger drinks are likely to get more expensive
  • A 50% cut in air passenger duty for flights between airports in England, Scotland, Wales and Northern Ireland
  • A new rate of air passenger duty of £91 on flights of 5,500 miles or more (note, this doesn’t apply to direct long-haul rates for Northern Ireland, which are devolved)
  • A new residential property developer tax (RPDT) of 4% to pay for cladding costs, which will apply to developers with annual profits higher than £25 million
  • The time limit for making capital gains tax (CGT) returns and associated payments on account when selling UK land and property is extended from 30 days to 60 days (for UK residents only)
  • The ISA annual subscription limit for 2022/2023 will stay at £20,000 for adults and £9,000 for juniors
  • The Universal Credit taper rate to be cut by 8%, meaning for every extra £1 someone earns above their work allowance, their Universal Credit will be reduced by 55p instead of 63p
  • The National Living Wage – for workers aged 23 and over – to go up by 6.6% to £9.50 an hour. There will also be increases in the National Minimum Wage for younger workers and the apprentice rate
  • Plans to reform R&D (research and development) tax reliefs
  • A temporary 50% business rates discount for the retail, hospitality and leisure sectors

Our verdict on the Autumn Budget

It was always likely to be a Budget aimed at rebuilding a fragile economy. We’re still in a pandemic and the situation is likely to be touch and go over the winter, so it was always unlikely the Chancellor would announce any severe measures right now.

This time around, there are no increases to capital gains tax and inheritance tax rates or allowances. But, to balance the books, it’s likely there will be more significant tax changes in the years ahead, although we don’t have a crystal ball to reveal which taxes will be affected – and when.

It would be wonderful if the Government’s strategy of creating a high-productivity, high-wage economy worked because it would naturally increase the tax take over time. But the current crisis is far from over, and all we can do is wait and see.

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Steph Churchill

Stephanie Churchill

Managing director & co-owner of Churchill Taxation