- Business rates – the current system is to be retained but with some key reforms (from 1 April 2023) including increasing the frequency of revaluations to 3 years and introducing new reliefs for investment in property improvements and green technology. In addition, temporary business rates reliefs were also announced for 2022-23: a freeze in the business rates multiplier and a 50% discount for the Retail, Hospitality and Leisure sectors (capped at £110k per business).
- R&D tax reliefs – will be reformed from April 2023 to improve their effectiveness by expanding qualifying expenditure to include data and cloud computing costs and to refocus support on innovation in the UK.
- Annual Investment Allowance – the temporary £1m allowance is to be extended to 31 March 2023.
- Banking surcharge – the surcharge rate will reduce from 8% to 3% with effect from 1 April 2023 and the annual allowance for groups will also be raised from £25m to £100m, which will help to remove more smaller UK banks from the scope of the surcharge.
- Residential property developer tax:–a new 4% tax (on relevant group profits over £25m) that certain companies derive from UK residential property development was confirmed to apply from April 2022.
- The Chancellor respected his manifesto pledge to keep Income Tax rates stable and he chose not to announce changes to Capital Gains Tax (CGT) or Inheritance Tax (IHT). However, the true impact on the taxation of individuals flows from the previous announcements below.
- The personal allowance, basic rate and higher rate limits have been frozen at £12,570, £37,700 and £150,000 respectively until April 2026. Alongside the previously announced Health and Social Care Levy and dividend tax rate increase of 1.25% (taking effect from April 2022), tax receipts should rise.
- Similarly, the IHT Nil Rate Band, CGT Annual Exempt Amount and pensions lifetime allowance will be frozen until April 2026. Combined with inflation, CGT and IHT receipts are forecast to rise.
- The Chancellor reiterated changes relating to the digital agenda, confirming the delay to "Making Tax Digital" for Income Tax Self-Assessment until April 2024 and giving further detail on other administrative reforms for self-employed and partners.
- The CGT reporting and payment window following the sale of UK residential property has been extended to 60 days, from the existing 30 days, a modest yet welcome change.
- National Living Wage – as anticipated, an increase such that employees aged 23 years and over will be entitled to £9.50 per hour for pay periods starting from 1 April 2022.
- Pension tax relief for low earners in net pay arrangements – the government will introduce direct top-up payments for affected net pay arrangement scheme members from 6 April 2024.
- Public sector pensions – following the McCloud case, legislation will be introduced to ensure that compensation payable is not taxable and individuals are not taxed on any retrospective breaches of pension savings limits.
- High skilled migration – a new Scale-Up visa will launch in Spring 2022 to help eligible growth businesses recruit key overseas talent who meet certain language requirements and have a salary of at least £33,000.
- National Insurance Contributions (NIC) – the previously announced 1.25 percentage point increase (to fund social care prior to the introduction of the separate Health and Social Care Levy) becomes effective from 6 April 2022.
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