a guide to Budget statement buzzwords. More...
BBC NEWS briefing. More
Autumn Budget 2021 statement and related documents - see the HM
Treasury webpages on the Chancellor's Statement & Related
documents including the Spending Review 2021.
Documents & Annexe
A Rates & Allowances
Other documents: More
Institute of Chartered Accountants in England and Wales (ICAEW)
- analysis and reaction to the Chancellor's second Budget in 2021.
Why capital gains tax reform should be top of Rishi Sunaks
Office of Budget Responsibility (OBR). More
is Insurance Premium Tax?
IPT is a tax on general
insurance premiums, including car insurance, home insurance,
and pet insurance. There are two rates of IPT: a standard rate of
12% and a higher rate of 20%, which applies to travel insurance, electrical
appliance insurance and some vehicle insurance. IPT increased over
the years - in 1994,
the introductory standard rate of IPT was just 2.5%. But over the
years IPT has increased, to 6% in 2015, then to 9.5% in November 2015,
and in October 2016 it rose by 0.5% to 10%. Todays rate
of 12% means that IPT has doubled in only a few years.
How much IPT are you paying on car insurance?
Assuming your premiums for a daily driven car and a classic MGV8 are
for example £400 and £250 the IPT before today's Autumn
Budget Statement would be £78 pa. A 1% increase in IPT would
raise that IPT charge by £6.50 pa to £84.50 pa. Fortunately
that modest increase did not arise!
See our report on fuel duty
Posted: 221027 @ 1415
overview - has inflation come back to haunt us?
Despite some headline monthly inflation figures well above the Bank
of England's (BoE) 2% target and wage increases running at up to 7%
in some sectors, it seems that the BoE does not think it is wise to
increase interest rates at this point in the economic recovery. With
the increase in UK Government debt that the Chancellor has built up
during the pandemic, the current BoE base rate means that the cost
of servicing that debt is very low by historic standards and the Chancellor
will want it to stay that way. However, even if it is clear by October
that inflation is set to stay high, the BoE may not put up interest
rates immediately: it's quantitative easing campaign will come to
an end in 2021 anyway and this is expected to take away some of the
inflationary pressures. If high inflation persists into 2022, it seems
likely that the BoE will have to act and increase interest rates at
some point during the year.
Fuel duty frozen for 12th year
Amid warnings that fuel prices could stay near record levels over
the next few weeks, and following the UK's recent fuel crisis, the
Chancellor announced the fuel duty rise has been cancelled for the
12th consecutive year. That's a saving of £1,900 for the average
car driver in the UK in that time. Fuel duty has been held at 57.95
per litre for petrol and diesel since March 2011. Motoring groups
have backed the fuel duty freeze with Edmund King, the president of
the AA, saying "we are on the road to economic recovery, so this
freeze on fuel duty helps to keep us on track. The continuation of
the fuel duty freeze will be welcomed by the car-dependent, key workers
and all businesses that rely on road transport".
Road tax changes
The VED exemption for cars built over 40 years ago remains and the
VED rates for cars over 1,549cc will rise by 5.4% to £295
for the tax year 2022-2023 from the current £280. The
rate for cars under 1,549cc are £180 and £170 respectively.
So RV8 owners will face a modest increase in their road tax on renewal.
UK public warms
to road pricing as fuel duty replacement is considered
The Government's ban on the sale of new petrol and diesel vehicles
from 2030 has made reform of motor taxes an urgent question for
the Treasury because the switch to electric cars means almost
£30bn in fuel duty raised annually for the Treasury will need
to be replaced. But politicians have shied away from introducing road
pricing as an alternative, however recent polling for the Social Market
Foundation suggests that the conventional political wisdom that voters
are opposed to road pricing no longer holds true. Its research found
that 38% back road pricing to replace fuel duty and other taxes, with
just over a quarter opposed (26%). The sales trend for electric vehicles
(EVs) is significant - last month sales of battery electric cars reached
a record 33,000, about 15% of all new vehicles sold in the UK in September,
including almost 7,000 Tesla Model 3s. But EVs remain a small fraction
of all cars on UK roads, currently between 1% and 2% of all cars on
UK roads. There was no announcement on this topic.
Beer duty on cask beers reduced
The Chancellor announced a reduction in duty on cask beer so a very
welcome benefit for V8 enthusiasts who enjoy real ales from brewers
like Hook Norton.
Capital Gains Tax changes
Unlike other types of investment assets, the profit you make upon
the disposal of a classic car does not generally attract Capital Gain
Tax (CGT). This is because cars are generally classed as a wasting
asset that is estimated to have less than 50 years
worth of use remaining. A
report by the Office of Tax Simplification, published in November
2020, recommended that CGT rates should be increased to bring them
into line with income tax. But it would be unlikely to raise significant
extra amounts of tax, as it is typically paid by only about 275,000
taxpayers and raises less than £10bn a year. There was no announcement
on this topic.
There has been much political discussion about a one-off wealth tax
to help pay for the huge debt built up by the UK Government providing
various levels of COVID support measures. There was no announcement
on this topic.
Insurance Premium Tax (IPT)
Insurance premiums have the additional cost of IPT, currently 12%.
so for motorists the possibility of a rise in IPT
rates is a concern. There was no announcement on this topic.