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Northern Lights over Skagsanden Beach, Lofoten Islands, Norway

As the world reopens to travellers, now is the perfect time to think about which sights are at the top of your bucket list. From natural wonders to feats of human engineering, the world is filled with awe-inspiring sights that promise to take your breath away. As you make plans for 2022, setting out some stunning places you want to see with your own eyes can help you choose the right destination for you.

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A woman wearing headphones as she sits on a sofa

When you put on music, you may choose tunes that suit your mood. But have you ever considered how the music you choose can impact how you’re feeling too? Research suggests music can have a much greater impact on mental wellbeing than you have considered before.

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A child writing a Christmas list with a Santa hat on

It’s the season for giving. If you’re buying Christmas presents for children this year, there are huge piles of toys to wade your way through. Whether you’re purchasing for your own children or not, it can be difficult to know what they really want, and which gifts will get used. If you need some inspiration, here are 10 of the toys that are set to appear on letters to Santa this year.

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Paper showing a graph and the text “Dividends” with a calculator and pen

Dividend Tax rates are set to rise, and it could affect the amount of tax you pay.

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A care worker serving dinner to an older man

Accessing and paying for care have become big issues. As more people reach old age, more people will inevitably need some level of support as they get older. Now, the government has taken steps to fund social care and limit the cost to individuals.

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An older person working at a desk

Figures suggest that an increasing number of people plan to work past the traditional retirement age. There are a variety of reasons for doing so and it also could help secure your long-term finances. If it’s something you’re thinking about, there are some things you need to consider.

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Disruptions in energy and logistics markets have affected us all in recent times, from higher gas prices to searching for fuel on the roads. There is much talk of higher inflation in the imminent future and this would seem to be logical in times of rising economic growth.

In much of our correspondence this year we have written about a forecast rise in inflation, potentially higher interest rates and higher levels of volatility toward the year’s end. We have seen much of this start to play out in both stock and bond markets in recent weeks. Driven by fears of higher prices, not only at the pump, but in supermarkets and elsewhere too, the headlines of higher prices have done much to worry investors.

The increase in gas prices have been driven by both supply and demand factors and should be relatively short-lived as the issues are not long-term problems. The petrol price has risen on the widely-reported shortages, not of fuel, but of drivers. The UK has around 100,000 less HGV drivers than it had in 2016.  As returning foreign workers and newly trained drivers, tempted by the sharply elevated wages, start hitting the roads this issue should also abate. It may be too early to tell but talk of stock shortages for Christmas look to be overblown. Increases in salaries will contribute to inflation but this tends not to be the destructive value-sapping kind and should be economically stimulative, as it will tend to affect those with highest propensity to spend.

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British chancellor, Rishi Sunak, leaving 11 Downing Street

“Employment is up, investment is growing, public services are improving, the public finances are stabilising, and wages are rising.” This is the backdrop against which Rishi Sunak presented the 2021 Autumn Budget.

Promising “a stronger economy for the British people”, the chancellor outlined his taxation and spending proposals. Here’s a summary of the key points and what they mean for you.

Firstly, though, a reminder of two important tax changes that have already been unveiled.

Two important announcements already made

Back in September, the prime minister made two headline-grabbing tax announcements.

From April 2022, National Insurance rates for both employees and the self-employed will rise by 1.25 percentage points across earnings bands. Millions of employees and many employers will see their National Insurance contributions increase, raising around £12 billion a year for the Treasury.

This rise will be rebranded as a “Health and Social Care Levy” from April 2023, when National Insurance rates will revert to their current levels.

From April 2023, anyone who is working beyond the State Pension Age will be asked to pay 1.25% on their earned income for the first time.

In addition, Dividend Tax rates will also rise 1.25 percentage points from April 2022. The £2,000 allowance will remain, but anyone earning more than £2,000 in dividends will pay a higher rate of tax.

The economy is recovering quicker than expected

The chancellor began his speech by outlining Office for Budget Responsibility (OBR) data that expects the economy to return to pre-Covid levels at the start of 2022.

The OBR has revised their growth estimate for the UK economy from 4% to 6.5% in 2021, then forecasts 6% growth in 2022, followed by 2.1%, 1.3% and 1.6% over the next three years. They also revised down the effect of Covid “scarring” on the economy from 3% to 2%.

Sunak also said that he expects inflation to average 4% over the next year. He highlighted two reasons for this:

  • As economies around the world reopen, demand for goods has increased more quickly than supply chains can meet
  • The pressures caused by supply chains and energy prices will take months to ease.

“I am in regular communication with finance ministers around the world and it’s clear these are shared global problems, neither unique to the UK, nor possible for us to address on our own,” he added.

The improving fiscal position also means that the chancellor forecasts a return to spending 0.7% of GDP on foreign aid before the end of this parliament.

The chancellor also confirmed that every government department will get a real terms rise in spending each year.

Tax

While the main tax announcements have already been made, the chancellor announced several reforms:

  • A new 4% levy on property developers with profits of more than £25 million, to help fund a £5 billion fund to remove unsafe cladding
  • A reduction in air passenger duty for domestic flights between UK airports from April 2023. 9 million passengers will see their duty cut by half, boosting regional airports. There will also be an increase in duty for long-haul flights of more than 5,500 miles
  • The bank surcharge, levied on bank profits, will reduce from 8% to 3% from April 2023. The chancellor said that this should help bolster London’s competitiveness as a global financial centre after Brexit
  • The planned rise in fuel duty has been cancelled. The average car driver now saves £1,900 a year because of a 12-year freeze in fuel duty.

In a tiny technical change, the deadline for residents to report and pay Capital Gains Tax after selling UK residential property will increase from 30 days after the completion date to 60 days.

The chancellor also set out plans to reform alcohol duty, made possible because the UK has now left the European Union.

Arguing that the tax, first introduced in 1643 to pay for the Civil War is “a mess”, the number of main duty rates will reduce from 15 to 6 around the general principle of “the stronger the drink, the higher the rate”.

  • Small Brewers Relief will be extended to cider makers and other producers making drinks less than 8.5% ABV
  • The duty premium on sparkling wines will end, so drinkers will pay the same duty on prosecco and English and Welsh sparkling wine as on still wines
  • A new “draft relief” will see a lower duty rate on draft beer and cider. Set to benefit community pubs, this cuts duty by 5% and represents the biggest cut to cider duty since 1923 and the biggest cut to beer duty for 50 years.

Shares in pub chain JD Wetherspoon jumped 5.5% on the news.

Finally, the chancellor announced a total of £7 billion of cuts to business rates. The retail, hospitality, and leisure sectors will benefit from a 50% business rates cut for one year, enabling businesses to claim a discount on their bill up to £110,000. This will benefit cinemas, music venues and so on.

Sunak concluded his speech by confirming that “my goal is to reduce taxes” calling it “my mission for the remainder of this parliament”.

Despite this, the OBR has confirmed that the tax burden is set to rise from 33.5% of GDP recorded before the pandemic in 2019/20 to 36.2% of GDP by 2026/27.

This is the highest level since late in Clement Attlee’s post-war Labour government in the early 1950s, when the economy was struggling after the economic shock of the second world war.

Housing

To boost the building of new homes, the chancellor announced an £11.5 billion fund to build up to 180,000 new affordable homes. He described it as “the largest cash investment in a decade, 20% more than the previous programme”.

Sunak also confirmed a £1.8 billion brownfield fund, which will help “unlock 1 million new homes”.

Savings

The chancellor announced the creation of a new National Savings & Investment (NS&I) Green Savings Bond.

These were made available to customers via NS&I on 22 October and will be on sale for a minimum of three months. These three-year fixed-term savings products will pay an interest rate of 0.65% and customers can invest between £100 and £100,000.

As with all NS&I products, the Green Savings Bonds come with a HM Treasury-backed 100% guarantee.

The Treasury also announced that the Individual Savings Account (ISA) annual subscription limit will remain at £20,000 in 2022/23. The annual subscription limit for Junior ISAs and Child Trust Funds for 2022/23 will be maintained at £9,000.

Changes to the National Living Wage and Universal Credit

The National Living Wage (the minimum wage) for over-23s will increase from £8.91 to £9.50 an hour. This represents an increase of £1,000 a year for a full-time worker and more than 2 million people will benefit.

“To make sure work pays”, the chancellor announced a change to the Universal Credit taper from 63p to 55p and promised to introduce this before December 1st. He will also increase work allowances by £500 a year to help working families with the cost of living.

This enables more working families on the lowest incomes to keep more of their earnings. Sunak says that a single mother of two renting, and working full-time on the National Living Wage, will be better off by around £1,200.

Other spending announcements

Sunak unveiled a raft of spending commitments in areas from education to health.

  • £21 billion on roads and £46 billion on railways
  • A guarantee to spend £5.7 billion for London-style transport systems across city regions
  • Spending on cycling infrastructure of more than £5 billion
  • 20,000 new police officers, an extra £2.2 billion for courts and rehab facilities, and £3.8 billion for prison-building
  • £300 million towards A Start for Life, supporting new parents, and £150 million for Early Years training and holiday programmes
  • At least 100 places will benefit from the “levelling up” fund. The first round of successful bids to the fund, worth £1.7 billion, have been announced, including projects in Stoke-on-Trent, Bury and Burnley
  • £500 million in funding to help people back into work in “the most wide-ranging skills agenda this country has seen in decades”. This includes careers help for older workers and builds on extra funding for apprenticeships and traineeships already announced in the spring.

Sunak also announced £205 million to transform grass-roots sport by funding up to 8,000 community sports pitches. He also committed £11 million towards the FA bid to host the 2030 World Cup.

There will also be £2 million for a new Beatles attraction on the Liverpool waterfront.

Get in touch

If you have any questions about how the Autumn Budget will affect you and your finances, please get in touch.

Please note

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

GD Group Logo

Earlier this year, we decided the time had come to give our branding, both online and offline, a makeover. So, we wanted to show you our new logo and explain what happens next.

However, before we do that we want to reassure you that nothing else is changing. We will continue to be the Gibbs Denley that you’ve come to rely on, with the same team of people providing advice, support and assistance.

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British prime minister, Boris Johnson

This week, the government has made two major policy announcements that are likely to directly affect your finances. [click to continue…]