Page 3 - Budget Newsletter 2021

• The window for reporting and paying capital gains tax (CGT) on residential property sales increases immediately
from 30 days to 60 days. (For non-UK residents disposing of residential and non-residential property in the UK,
this deadline also increases from 30 days to 60 days.)

• For pension contributions paid by low earners, from 2024/25, HMRC will make top up payments, effectively giving
full tax relief, which under current rules might not be available.

• The business rates regime will move to a three yearly valuation cycle from 2023, with the business rates multiplier
frozen for the coming year. Retail, hospitality and leisure properties will benefit from a new temporary 50%
business rates relief in 2022/23, capped at £110,000 per business.

• No changes were announced to inheritance tax (IHT) or CGT.

• Alcohol duty will be radically reformed, so that it will be directly related to alcohol content.

In this Newsletter we look at the impact of both the changes announced in the Budget and those revealed last month
on various groups of taxpayers. The categorisation is inevitably rather arbitrary, so it pays to read all sections.
Similarly, several of the tax planning points – such as those listed below in our 12 Quick Tax Tips – are universal.

If you need further information on how you will be affected personally, you are strongly recommended to consult
your financial adviser.

12 QUICK TAX TIPS

1. Don’t waste your (or your partner’s) £12,570 personal allowance.
2. Don’t forget the personal savings allowance (PSA), reducing tax on interest earned.
3. Don’t ignore the dividend allowance, saving tax of up to 39.35% £2,000 of dividends.
4. Don’t dismiss National Insurance contributions – they are really a tax at up to 28.3%.
5. Think marginal tax rates – the system now creates 60% (and higher) marginal rates.
6. ISAs should normally be your first port of call for investments and then deposits.
7. Even if you’re eligible for a Lifetime ISA (LISA), you still might find a pension is a better choice.
8. Tax on capital gains is usually lower and paid later than tax on investment income.
9. Trusts can save IHT, but suffer the highest rates of CGT and income tax.
10. File your tax return on time to avoid penalties and the taxman’s attention.
11. If you are entitled to a company car, going hybrid or electric could slash your tax bill.
12. Don’t assume HMRC won’t find out: the recent Pandora Papers are a warning.

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