Winners and losers from the autumn Budget 2021 – and what it means for your money (original) (raw)

We take you through the key points in the Chancellor's Budget and how it will affect you

28 October 2021 8:17am BST

Welcome to Telegraph Money's long-running "winners and losers" Budget report, where you can see at a glance which of the Chancellor's measures will make you richer and which will make you poorer.

Budget winners

Buy-to-let investors

The "reporting window" for landlords' capital gains on the sale of property will be doubled from 30 days to 60 days from the completion of the transaction.

Sarah Hollowell of Killik & Co, a wealth management firm, said: "The current 30 day window has made things very difficult for anybody who has sold a residential property that isn’t their main home. There are various challenges with the reporting that are increased by the time constraints.

"The extension of the filing date from 30 days after the completion of the property disposal to 60 days will be most welcome and will give people the time they need to collect all information to enable them to calculate the capital gain/loss."

Benefit claimants

The Chancellor will reduce the effect of the end of temporary increases to Universal Credit during the pandemic by making changes to the "taper", which determines how much of the benefit is taken away as a claimant's other income rises. The tax on each additional pound of income will fall from 63p to 55p. The change will take effect by December at the latest, Mr Sunak said.

Drivers

Fuel duty has been frozen again for the 12th consecutive year, at 57.95p per litre. The levy was due to rise to 60.79p per litre, which would have added 3.5p per litre to the pump price after VAT is applied on top. A full tank of fuel would have cost £2 more, the RAC has calculated.

On Sunday, the price of petrol hit 142.94p, a record high, higher than the 142.48p level in April 2012. Fuel duty earned the Government roughly £28bn last year.

Drinkers

Duty rates on beer, cider, wine and spirits will be frozen for another year. Thereafter the system will be simplified: alcoholic drinks will in future be taxed according to the percentage of alcohol they contain and the number of duty bands will be cut from 15 to six.

But there is special treatment for draught beer "to recognise the importance of pubs". Budget documents said: "The Government will cut duty rates on draught beer and cider by 5 [percentage points], taking 3p off a pint. This is the biggest beer duty cut for 50 years and the biggest cut to cider duty since 1923."

Short-haul fliers

Air passenger duty on domestic flights will be halved benefitting those travel large distances within the UK. Air Passenger Duty is a levy paid by airlines, but ultimately funded by passengers through the cost of their tickets, meaning domestic flights will become cheaper.

Low earners who save in a pension

An anomaly that means low earners don't get tax relief on their pension savings has been removed. More than a million savers will benefit from this solution to the "net pay" problem by an average of £53 a year.

Builders

The Chancellor has ring fenced £65m to take the planning regime digital and improve "certainty" for homeowners and developers. It has also allocated £65m in the next tax year to increasing caseworker capacity at the Land Registry, which has been plagued by delays this year.

Talk of a new digital planning system has been in the works for a while, but this is the first time specific funding has been allocated. The Government said it hoped a digital system would ensure “better outcomes for the environment, growth and quality of design”.

Lawrence Bowles, of the estate agency Savills, said a digital planning system would hopefully reduce the number of decisions appealed in an already backlogged system.

“It will ultimately mean there is better information available to developers and planning officers. Hopefully it will mean planning is less of an obstacle to building the homes we need,” he said.

The lower-paid

The National Living Wage, also known as the minimum wage, will increase to £9.50 an hour from £8.91 – an increase of £1,000 a year for a full-time worker. Around 2.5 million people will benefit.

Public sector workers

Around five million public sector workers will get a pay rise as the freeze in pay announced during the pandemic ends.

Budget losers

Long-haul fliers

A new "ultra-long-haul" rate of air passenger duty of £91 for journeys of more than 5,500 miles will be introduced. The other rates will be £13 for journeys of 0 to 2,000 miles and £87 for those of 2,000 to 5,500 miles.

Households

There were no measures to assist householders with rising domestic gas and electricity bills. There had been rumours the Chancellor would scrap the 5pc VAT paid on domestic bills to help families to tackle rising bills, but this did not materialise.

Smokers

Tobacco duty will rise by its usual amount of RPI inflation plus 2 percentage points. The change takes effect today.

Cladding victims

The Government confirmed that it would charge a 4pc levy on building developers' profits to fund cladding remediation, but there was no new money announced to protect leaseholders. The tax takes the building safety fund to £5.1bn, but this is still below estimates that fixing the problem could cost more then £15bn. This is before rising building costs have been accounted for.

Council tax payers

Mr Sunak confirmed that local authorities would be able to increase tax rates by 3pc a year, which could add £40 to bills. According to Treasury documents, councils will be able to increase council tax by 2pc over the next three years without holding a local referendum. Those with care responsibilities will be able to raise an additional 1pc annually through the "adult social care precept".