Tax News for November 2021
Published: 11 Nov 2021
...to November's Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.
We must start of by saying "Congratulations!" to our colleague, Malakai, for passing her Level 3 AAT qualification
Some important updates and reminders in this months addition. Any questions, please get in touch.
We would like to welcome all the new clients who have joined us in the last month.
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- The Autumn Budget 2021
- Personal Tax
- The marriage allowance
- Making Tax Digital for income tax
- National Insurance and dividend tax rises announced for social care reform
- Plastic Packaging Tax
- Tonnage Tax
The Autumn Budget 2021
The Chancellor Rishi Sunak presented his third Budget on 27 October 2021. In his speech he set out the plans to "build back better" with ambitions to level up and reduce regional inequality.
Our summary focuses on the tax measures which may affect you, your family and your business. To help you decipher what was said we have included our own comments. If you have any questions please contact us for advice.
Our full report on the Autumn Budget can be found here.
The personal allowance is currently £12,570. The Chancellor announced in the March 2021 Budget that the personal allowance will be frozen at £12,570 for the tax years 2022/23 to 2025/26.
There is a reduction in the personal allowance for those with ‘adjusted net income’ over £100,000. The reduction is £1 for every £2 of income above £100,000. So there is no personal allowance where adjusted net income exceeds £125,140.
The Marriage allowance
The marriage allowance permits certain couples, where neither party pays tax in the tax year at a rate other than the basic rate, to transfer £1,260 of their personal allowance to their spouse or civil partner.
For more information click on this link
National Insurance and dividend tax rises announced for social care reform
From April 2022, the government plans to create a new social care levy which will see UK-wide tax and National Insurance Contribution (NIC) increases.
There will be a 1.25% increase in NICs on earned income, with dividend tax rates also increasing by 1.25%. The money raised will be ringfenced for health and social care costs.
The Levy will be effectively introduced from April 2022, when NIC for working age employees, the self-employed and employers will increase by 1.25% and be added to the existing NHS allocation. The Levy will not apply to Class 2 or 3 NICs.
Plastic Packaging Tax
Draft legislation has been issued to establish a Plastic Packaging Tax. This is a new tax that applies to plastic packaging produced in or imported into the UK, that does not contain at least 30% recycled plastic. Plastic packaging is packaging that is predominantly plastic by weight.
The tax rate will be £200 per tonne of non-compliant plastic packaging. There will be an exemption for businesses that manufacture or import less than ten tonnes of plastic packaging per year. The tax will take effect from April 2022.
The UK’s tonnage tax regime will be reformed from April 2022 to help the UK shipping industry grow and compete in the global market. The reform is intended to make it easier for shipping companies to move to the UK, ensure they are not disadvantaged compared with firms operating in other countries, and reduce unnecessary administrative burdens
Contactless limit to increase to £100
The national roll-out of the new £100 spending limit for contactless card payments will begin from 15 October 2021, banking trade body UK Finance has confirmed.
The decision to raise the contactless limit from £45 to £100 was made by HM Treasury and the Financial Conduct Authority (FCA) following a public consultation and discussions with both the retail and banking sectors. It follows on from the successful increase in the limit from £30 to £45 in April 2020.
From 15 October 2021, consumers will start to see retailers accepting contactless payments up to the new £100 limit, which will give customers more flexibility when shopping in store.
November key tax dates
19th November- Deadline for postal payments of CIS/NICS/PAYE to HMRC (22nd for electronic submissions)
1st December- New Advisory Fuel Rates (AFR) for company car users apply from today. New Advisory Fuel Rates (AFR) for company car users apply from today. The rates can be found by visiting https://www.gov.uk/government/publications/advisory-fuel-rates
Further information can be found here.