Autumn Budget 2021 - Income tax and Company Car Tax
27 October 2021
There were no surprises about income tax, given that March’s Budget froze the figures for England and Northern Ireland for the next four tax years. Therefore, the Personal Allowance for tax-free income for 2022-23 remains at £12,570 and the Higher Rate Threshold (HRT), when higher earners start to pay 40% tax, remains at £50,270.
The Marriage Allowance (also known as the Transferable Tax Allowance), Blind Person’s Allowance and Married Coupe’s Allowance are also frozen at their 2021-22 levels and UK income tax rates remain unchanged.
Devolved income tax
The Scottish Government is responsible for setting income tax rates and thresholds for Scottish taxpayers, which now vary quite substantially from the rest of the UK. It has announced that it will publish the 2022-23 Scottish Budget on 9 December 2021.
The Welsh Government has the ability to vary income tax rates for Welsh taxpayers, although to date it has set Welsh Rates of Income Tax (WRIT) at levels that ensure parity with English and Northern Irish taxpayers. It has not published a date for releasing its 2022-23 Budget yet.
The CIPP will publish details of Scottish and Welsh proposed figures for 2022-23 as soon as these become available.
Company cars, vans and fuel
The Budget document confirms that the company car and van benefit charges and their associated fuel benefit charges will increase for 2022-23 in line with the Consumer Price Index (CPI), 3.1%.
The company car appropriate percentages are as previously announced. For the 2022-23 tax year:
Appropriate percentages for vehicles first registered before 6 April 2020 (NEDC) are frozen at their 2020-21 levels, with the exception of the 0kg/km rate, which increases from 1% to 2%
Appropriate percentages for vehicles first registered on or after 6 April 2020 (WLTP) will increase by 1% to match the corresponding NEDC appropriate percentage.
All rates are then frozen for the 2023-24 and 2024-25 tax years.
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