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Autumn Budget 2021
Annual Tax on Enveloped Dwellings The Annual Tax on Enveloped Dwellings (ATED) charges increase automatically each year in line with inflation. The ATED annual charges will rise by 3.1% from 1 April 2022 in line with the September 2021 Consumer Price Index. Residential Property Developer Tax A new tax will be applied from 1 April 2022 on company profits derived from UK residential property development. The tax will be charged at 4% on profits exceeding an annual allowance of £25 million. For companies that are part of a group, the £25 million allowance will be allocated by the group between its companies. Cultural relief The government has announced that it will temporarily increase cultural tax reliefs for theatres, orchestras, museums and galleries across the UK from 27 October 2021 to 31 March 2024, increasing the relief organisations can claim as they invest in new productions and exhibitions. Changes will also be introduced to better target the cultural reliefs and ensure that they continue to be safeguarded from abuse. These will apply from 1 April 2022. Research and Development relief reform Research and Development (R&D) tax reliefs for companies will be reformed to: • support modern research methods by expanding qualifying expenditure to include data and cloud costs • more effectively capture the benefits of R&D funded by the reliefs through refocusing support towards innovation in the UK • target abuse and improve compliance. These changes will take effect from April 2023. Cross-border group relief Following the UK’s exit from the European Union (EU), the government is bringing the corporation tax group relief rules relating to European Economic Area (EEA) resident companies into line with those for non-UK companies resident elsewhere in the world. This applies to accounting periods ending on or after 27 October 2021 and will affect UK groups with subsidiary companies established in the EEA along with EEA-resident companies that are trading in the UK through a permanent establishment.
Online Sales Tax The government has announced its plans to consult and explore the arguments for and against the introduction of an ‘Online Sales Tax’. Should such a tax be introduced in future, it would raise revenue to fund business rates reductions. Business rates review Business rates have been devolved to Scotland, Northern Ireland and Wales. The government announced at Budget 2020 that it would conduct a fundamental review of the business rates system in England. The government’s objectives for the review were reducing the overall burden on business, improving the current business rates system and allowing the consideration of more fundamental changes in the long term. In March 2021, the government published the Interim Report of the review. The Final Report was published on 27 October 2021. Collectively, these set out the government’s commitments by: • Supporting local high streets as they adapt and recover from the pandemic by introducing a new temporary business rates relief in England for eligible retail, hospitality and leisure properties for 2022/23. Over 90% of retail, hospitality and leisure businesses will receive at least 50% off their business rates bills in 2022/23. This amounts to support worth more than double the relief that was announced pre-COVID for the 2020 to 2021 financial year and includes additional businesses such as hotels, gyms and bowling alleys. • Cutting the burden of business rates for all businesses by freezing the multiplier for 2022 to 2023. • Introducing a new relief to support investment in property improvements , enabling occupying businesses to invest in expanding their properties and making them work better for customers and employees. • Introducing newmeasures to support green investment and the decarbonisation of non-domestic buildings. This will provide exemptions for eligible green plant and machinery such as solar panels, wind turbines and battery storage used with renewables and electric vehicle charging points, as well as a 100% relief for low-carbon heat networks that have their own rates bill. • Making the system fairer by moving to three-yearly revaluations from 2023 . • Providing stability ahead of the 2023 revaluation by extending Transitional Relief and the Supporting Small Business Scheme for 2022 to 2023 to protect small businesses from significant bill increases in the final year of the current revaluation cycle.
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