With more leaks than a rusty colander, there was little ‘news’ about tax specifics in today’s Budget speech.
Anyone expecting significant tax rises to be rolled out may have been surprised that there was no ‘windfall’ wealth tax, nor indeed any announcement of significant tax rises to balance some of the spending and tax reliefs announced. But the harsher news on benefits and tax had generally been preannounced or leaked. In particular, the withdrawal of the extra £20 in Universal Credit, a 1.25% rise in National Insurance from April 2022, higher tax on dividends above the £2,000 threshold, and an increase to Corporation Tax rates. This left today’s speech with more palatable headlines: tax and business rate reliefs for businesses engaging in research and development, concessions for various cultural and hospitality organisations, and a reduction in the taper applied to Universal Credit for those earning above a certain amount (although this does not help the lowest-income claimants).
Much was made of ‘simplification’, particularly in relation to duties on alcohol. But a consultation is being opened on an online sales tax – another new tax, and one likely to fall eventually on ordinary consumers.
Also previously announced and recently postponed, from April 2024, Making Tax Digital for income tax will mean that taxpayers who are self employed, or landlords, will need to keep digital records (spreadsheet, or software packages) and provide quarterly updates to HMRC instead of just an annual tax return. Traders who do not use 31 March or 5 April as their accounting date will be pushed towards changing to using the tax year for their accounts.
Key rates and allowances for personal tax can be seen here:
I shall be adding detail in the coming days as I look at the detail in the Budget documents.