The next step

Summary of the tax rates etc. for 2022/23

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More information about Freeports

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What was in this year’s Budget for you?

Capital allowances

One of the Chancellor’s welcome announcements was to extend the temporary increase in the annual investment allowance (AIA). The AIA allows businesses tax relief for the full cost of expenditure on most types of equipment for the financial period in which they buy it. The AIA was due to revert to £200,000 (from £1 million) on 1 January 2022. The higher AIA will continue to apply to purchases made up to and including 31 March 2023.

Higher wage bills

Some employers will face higher payroll costs next year. Higher than inflation increases to the minimum and living wage rates will apply from 1 April 2022. The new rates are:

A cut in business rates

There was more help for the struggling hospitality, retail and leisure sectors. Their business rates bill, up to £110,000, will be reduced by 50% for 2022/23. Businesses qualifying for the discount will be notified by their local rating authority.

Freeport tax breaks

The Budget announced new Freeport tax sites. Businesses in these areas will benefit from VAT and other tax breaks with effect from 3 November 2021 (see The next step ). The areas designated as Freeports are:

• Teeside: Teesworks East, Teesworks West and Wilton International
• Humber: Hull East, AMEP and ABP Immingham;
• Thames area: Dagenham, Tilbury and London Gateway.

More time to report capital gains

The time limit for reporting to HMRC capital gains made from the sale or transfer of residential property has been doubled. Instead of 30 days you now have 60 days to notify HMRC and pay any tax liability. The more generous deadline applies to gains made on or after 27 October 2021.

Delayed pensions

The Chancellor confirmed that from 6 April 2028 you will have to be aged at least 57 before you can access your private pension savings. Currently the minimum normal pension age is 55. However, if on 4 November 2021 you’re in a pension scheme which has a protected age for taking your pension rights you won’t be affected by the change.

Tax/NI rates, allowances and thresholds

There were no surprises here. The Budget confirmed that personal tax-free allowances and rate bands would be unchanged for 2022/23. However, there were small changes to the NI thresholds and a confirmation of the previously announced hike in NI rates (see The next step ).

For more information about Freeports and for a summary of the tax rates etc. for 2022/23, visit https://www.tips-and-advice.co.uk , Download Zone, year 22, issue 4.