Autumn 2021 budget - Contractor Highlights
Last week the Chancellor of the Exchequer, Rishi Sunak revealed the Autumn 2021 budget.
We’ve created a summary to highlight the elements most relevant for you.
Read on to learn what’s changing.
Income tax rates fixed until April 2026
The current rates will remain in place for another 4 years. Keeping the personal allowance at £12,570. The basic rate at £37,700 and the higher rate at £150,000.
National Insurance increase
NI contributions are going up from April 2022. The rise of 1.25% will apply for 1 year. In April 2023 NI contributions will return to the current rates. However, the 1.25% will remain and become a separate tax known as the Health and Social Care Levy.
Dividend tax rise
Dividend tax is also rising by 1.25%. The tax-free allowance of £2,000 per year will remain.
National living wage increase
The National living wage will increase to £9.50 per hour for those aged 23 years and older.
Fuel duty increase cancelled
In the midst of record high prices at the pumps, the Treasury have scrapped plans to raise the fuel duty.
Corporation tax to rise
Corporation tax will increase to 25% in 2023. The 19% rate will remain in place for businesses earning less than £50,000 in profits. There’ll also be relief in place for those with between £50,000-£250,000 in profits.
No update to tax-free pension contributions, meaning the £40,000 maximum amount still stands.