Chancellor Rishi Sunak outlined the Government’s tax and spending agenda for 2022 today. Below, we summarise the key points.
Taxation
No changes to Capital Gains Tax (CGT) rates (as was widely anticipated leading up to the budget)
The deadline to submit a capital gains tax return, and pay any CGT due, on a disposal of UK homes has been extended, with immediate effect, from 30 to 60 days.
Confirmation of the increase to income tax on dividends by an additional 1.25%. The dividend ordinary rate will be set at 8.75%, the dividend higher rate will be set at 33.75% and the dividend additional rate will be set at 39.35%. The dividend trust rate will also increase to 39.35% to remain in line with the dividend additional rate. The changes will apply UK-wide and will take effect from 6 April 2022.
Confirmation business rates to be retained and reformed
A 50% business rates discount for the retail, hospitality, and leisure sectors in England in 2022-23, up to a maximum of £110,000
Planned rise in fuel duty to be cancelled amid the highest pump prices in eight years
Consultation on an online sales tax
Tax relief for museums and galleries will be extended for two years, to March 2024
Wages and Benefits
National Living Wage to increase next year by 6.6%, to £9.50 an hour
Universal Credit taper rate will be cut by 8% no later than 1 December, bringing it down from 63% to 55%
Universal Credit work allowance raised by £500 a year
Other Points
Extra £2.2bn for courts, prisons and probation services, including funding to clear the courts backlog
Core science funding to rise to £5.9bn a year by 2024-25
£6bn of funding to help tackle NHS backlogs
£7bn for transport projects in areas including Greater Manchester, the West Midlands and South Yorkshire
Schools to get an extra £4.7bn by 2024-25. There will be nearly £2bn of new funding to help schools and colleges to recover from the pandemic. £300m will be spent on a "Start for Life" parenting programmes, with an additional £170m by 2024-25 promised for childcare. A UK-wide numeracy programme will be set-up to help improve basic maths skills among adults.
Flights between airports in the UK nations will be subject to a new lower rate of Air Passenger Duty from April 2023. Financial support for English airports to be extended for a further six months. From April 2023, new ultra long haul band in Air Passenger Duty for flights of over 5,500 miles introduced.
Adjustments and simplification of alcohol duties
£24bn earmarked for housing: £11.5bn for up to 180,000 affordable homes, with brownfield sites targeted for development plus a levy will be placed on property developers with high profits to help create a fund to remove unsafe cladding.
£640m a year to address rough sleeping and homelessness
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Please note that the above is for general information only and does not constitute financial or tax advice. You should not rely on this information to make or refrain from making any decisions. You should always obtain independent professional advice in respect of your own situation.
