Tax changes budget 2021: What does the Budget today mean for YOUR taxes, will they go up
Budget 2021: Martin Lewis reveals 'clever' tax changes
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The Treasury has already revealed a string of new economic policies in recent weeks, including a rise in the living wage as well as increases in how much National Insurance employers and workers will pay. While many of the tax changes were already been announced prior to the Budget, the Chancellor unveiled his full tax plans this afternoon – with several changes coming for the British taxpayer.
Mr Sunak said this afternoon: “Today’s Budget does not draw a line under Covid, we have challenging months ahead.
“And let me encourage everyone eligible to get their booster jabs right away. But today’s Budget does begin the work of preparing for a new economy post-Covid.
“The Prime Minister’s economy of higher wages, higher skills, and rising productivity. Of strong public services, vibrant communities and safer streets. An economy fit for a new age of optimism.
“Where the only limit to our potential is the effort we are prepared to put in and the sacrifices we are prepared to make.”
But what tax changes are coming for you?
Business tax rates
Business rates have been cut by £7 billion in today’s Budget.
Mr Sunak announced reforms to business rates, including introducing more frequent revaluations every three years from 2023, relief for those adopting solar panels and a 12 month rate holiday on property improvements.
The Chancellor added: “First, we will make the business rates system fairer and timelier with more frequent revaluations every three years. The new revaluation cycle will be delivered from 2023.”
He went on: “We’re introducing a new investment relief to encourage businesses to adopt green technologies like solar panels. And I’m announcing today that we’ll accept the CBI and the British Retail Consortium’s recommendation to introduce a new ‘business rates improvement relief’.
“From 2023, every single business will be able to make property improvements – and, for 12 months, pay no extra business rates.”
Mr Sunak said his third step would be to cancel next year’s planned increase in the multiplier, adding: “I’m announcing today, for one year, a new 50 percent business rates discount for businesses in the retail, hospitality, and leisure sectors.”
As previously announced, the rate at which employers and workers pay will rise from April.
National Insurance increased by 1.25 percentage points for the average worker in the UK.
The Government pledged to invest £36 billion over the next three years to help the NHS recover from the coronavirus pandemic and reform the adult social care system so people no longer face catastrophic care costs.
It was a direct break away from promises outlined in the Tory 2019 election manifesto, which stated taxes would not rise throughout the Government’s next term.
High-strength alcohol will be subject to new tax increases, whereas lower-rate alcoholic drinks will have their taxes slashed.
The Chancellor said he was “radically” simplifying alcohol duty by introducing a system designed around the principle of “the stronger the drink, the higher the rate”.
He said: “Our new system will be designed around a common-sense principle: the stronger the drink, the higher the rate.
“This means that some drinks, like stronger red wines, fortified wines, or high-strength ‘white ciders’ will see a small increase in their rates because they are currently undertaxed given their strength.”
The planned rise in fuel duty will be axed, according to the Chancellor.
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