Mr Sunak released his highly anticipated Autumn 2021 budget last week. As part of our follow up blog, we will be looking at what this meant for income tax and company car tax. Continue reading to find out more.
The budget revealed no surprises about income tax, which was expected due to the March budget freezing the figures for England and Northern Ireland for the next four tax years.
This means that personal allowance on tax-free income remains the same for 2022-23 at £12,570. The higher rate threshold for high earners paying 40% tax also remains at £50,270.
Other taxes and personal allowances that remain unchanged:
- Married Coupe’s Allowance (Frozen at 2021-22 levels)
- Blind Person’s Allowance
- The Marriage Allowance
- UK Income Tax Rates
The Government for Scotland has full responsibility for setting income tax rates for the taxpayers in Scotland. Previous budgets have shown that these rates can vary quite a lot compared to the rest of the UK. The Scottish budget for 2022-23 is due to be released on 09 December 2021.
The devolved Government can also vary income tax in Wales through Welsh Rates of Income Tax (WRIT), although, unlike Scotland, the Welsh government rates have been set at levels similar to England and Northern Ireland. Wales has not yet set a date for its release of the 2022-23 budget.
Company Cars, Vans & fuel
It was revealed in the budget that company car tax rates previously announced for 2022/23 will remain frozen until 2024/25.
The company car and van benefit charges will increase to follow the Consumer Prices Index (CPI) inflation rate (3.1%). Changes to company vehicle and fuel benefits charges will start from 06 April 2022.
Company car appropriate percentages previously announced for the 2022/23 tax year are as follows;
- Appropriate percentages for vehicles registered before 06 April 2020 have been frozen to their 2020-21 levels. This is excluding the 0kg/km rate, which will increase from 1% to 2%
- Appropriate percentages for vehicles registered on or after 06 April 2020 will increase 1% to match NEDC appropriate percentage.