On Wednesday Chancellor Rishi Sunak revealed a bumper £150 billion worth of spending in his new UK budget, as well as a variety of reforms and tax changes.
He said he was presenting a “new age of optimism” with his “generous” Budget promising public spending increases of 3.8% a year in real terms.
The Chancellor said this was “the largest increase this century.”
He was upbeat about the UK’s recovery from the pandemic saying the damage caused by Covid was less than expected.
But this doesn’t mean it’s all clean sailing, Sunak admitted inflation will carry on rising, with some predictions saying it could go as high as 5%.
Sunak also acknowledged the tax burden on the country was the highest it had been at any point since Clement Atlee’s government in the 1940s.
He justified this by saying the country had spent an extraordinary amount during the pandemic and promised to lower taxes this parliament.
What were the key announcements in the new UK budget?
For retail, hospitality and leisure businesses will be eligible for a temporary 50% business rates cut from April 2022 up to a maximum of £110,000.
In addition to this the planned annual increase in rates for all firms has been scrapped for the second year in a row.
All businesses will also be able to make improvements and expand their property without having to pay any extra rates for 12 months.
There is also extra relief for businesses that choose to invest in green technology like solar panels and heat pumps.
The Chancellor said this would cost £1.7 billion but justified it by saying the relief was to help the businesses hit hardest by the pandemic recover.
Capital gains tax change
There was a slight change to capital gains extending the amount of time residents have to report and pay the tax after selling UK residential property from 30 to 60 days after the completion date.
The new rule came into effect immediately after the Chancellor announced it and was welcomed by property investors.
Annual investment allowance
The annual investment allowance will remain at £1 million until at least 2023.
National living wage increase
Announced before the budget, the National Living Wage (the minimum wage for all people over the age of 23) will be increased by 6.6% to £9.50.
National insurance increase
The previously announced 1.5% rise in National Insurance increase was also technically part of the budget.
It was an increase for both businesses and employees, effectively making at 3% increase.
The Chancellor said the increase was necessary to reform social care, although in reality most of the money is going to the NHS, which also received a substantial increase in the budget.
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Whether you are an established landlord or someone who is planning to venture into the sector, you are well advised to hire a professional property accountant so you can make the smart choices for your future.
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