1. Alcohol duties: The Chancellor’s announcement of a consultation on significant reform to alcohol duty to take effect from February 2023 will reduce the different bands from 15 to six and aim for “the higher the alcohol content, the higher the tax”. Small brewer relief will extend to other products including cider as well as beer. The 28% premium on sparkling wines will go, and a draught relief for drinks sold from containers over 40 litres will be introduced. All planned increases to alcohol duty have been cancelled.
2. Business rates in England: A new one-year 50% business rates discount for the retail, hospitality and leisure sectors for 2022-23 is announced and next year's planned increase in the multiplier will be cancelled. From 2023 revaluations will be on a three-yearly basis, and a ’business rates improvement relief’ will be introduced to allow property improvements to be made without an increase in rates for 12 months as well as a relief for ‘green’ investment. Any changes to Scottish business rates will be announced at the Scottish Budget on 9 December.
3. No significant changes to CGT were announced, despite concern in some quarters of a possible increase.
4. The current temporary £1m annual investment allowance (AIA) will be extended for one year and three months from 1 January 2022, aligning the end of the temporary AIA limit with the end of the super-deduction introduced in the Spring Budget 2021.
5. R&D tax reliefs will be reformed by being expanded to include data and cloud costs, but will be refocused to target domestic expenditure.
6. The new Residential Property Developer Tax, which applies from 1 April 2022, will be paid at the rate of 4% on profits from residential property development exceeding an annual allowance of £25 million. The new tax will be included in the corporation tax returns of relevant companies.
7. A welcome announcement for some of the hardest hit cultural sectors over the pandemic: the Theatre, Orchestra and Museums & Galleries Exhibition tax reliefs will receive temporary rate uplifts. From 27 October 2021, rates of relief will be increased from 45% to 50%, before returning to normal levels by 1 April 2024. For museums and galleries, existing tax relief will be extended for a further two years to 31 March 2024.
8. Dividend tax rates/NIC: It’s worth remembering that when NIC rates increase by 1.25% (from April 2022) as a stepping stone to the new Health and Social Care Levy, dividend rates will also increase. The new dividend rates of income tax will be 8.75% (basic rate); 33.75% (higher rate) and 39.35% (additional rate).
9. Re-domiciliation: HMRC has issued a consultation on corporate re-domiciliation, with a view to making it easier for overseas companies to relocate to the UK while maintaining their legal identity. While the UK Government appears committed to ‘inward re-domiciliation’ (bringing companies into the UK), it is not clear whether they will introduce equivalent rules for ‘outward re-domiciliation' (companies leaving the UK).
10. Tonnage tax: The UK Government will make three substantive changes to the tonnage tax regime from April 2022 - (i) the ’lock in’ period for the regime will reduce to eight years, and the admissions criteria will be revised; (ii) they will revise the ’flagging’ rules; and (iii) they will make tweaks to the rules for overseas shipping companies.
11. Two new bands of Air Passenger Duty will take effect from 1 April 2023; a domestic band for intra-UK travel of £6.50 (down from £13) and an ultra long-haul band for flights to destinations more than 5,500 miles from London (up £4 from previous rates for long haul flights). Plans to devolve the APD to Scotland as the Air Departure Tax are currently under review.