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ICAEW's Tax Faculty provides a summary of the announcements in the 2021 Autumn Budget on duties.

Gaming duty

The gross gaming yield (GGY) bandings for gaming duty will be raised in line with RPI for accounting periods beginning on or after 1 April 2022.

Changes to rebated diesel and biofuels

Technical amendments will be made to the legislation that restricts use of rebated (red) diesel and rebated biofuels from 1 April 2022, to ensure it operates as intended.

The changes amend provisions relating to:

  • certain vehicles, machines and appliances;
  • restrictions on the use of red diesel and rebated biofuels; and
  • travelling fairs and circuses.
  • They also make changes to the circumstances in which the use of red diesel and rebated biofuels will be permitted, including provisions aimed at the transition to the new rules.

Find out more:

Vehicle excise duty: cars, vans and motorcycles

Vehicle excise duty (VED) rates for cars, vans, motorcycles, and motorcycle trade licences will be increased by RPI with effect from 1 April 2022.

VED and levy rates for HGVs

Collection of the heavy goods vehicles (HGV) levy will be suspended for a further 12 months from 1 August 2022. HGV VED rates will also remain frozen in 2022 to 2023.

Temporary extension to road haulage cabotage

Cabotage refers to the transport of goods between two places in the same country by a transport operator from another country for the purposes of hire and reward.

VED legislation will be amended to allow, from 28 October 2021 until 30 April 2022, unlimited cabotage movements of HGVs within Great Britain for up to 14 days after arriving in the UK on a laden international journey, without these operators needing to pay VED.

Tobacco duty rates

With effect from 18:00 on 27 October 2021, legislation will be introduced to:

  • Increase the duty rates for all tobacco products by the tobacco duty escalator of 2% above inflation (based on RPI).
  • Increase the rate for hand-rolling tobacco by an additional 4% above the escalator, to 6% above inflation (based on RPI).
  • Increase the Minimum Excise Tax (MET) by an additional 1% above the escalator, to 3% above inflation (based on RPI).

Tobacco products: tracing and security

Tougher sanctions are to be introduced to tackle tobacco duty evasion, which will be linked to the tobacco track and trace system (TTS), with enforcement by HMRC and Trading Standards. The new powers will allow HMRC to:

  • issue penalties of up to £10,000 for failure to comply with TTS requirements;
  • make liable to forfeiture TTS compliant product that is found alongside product that does not comply with TTS requirements;
  • exclude retailers from TTS on a temporary or permanent basis;
  • extend TTS enforcement powers to Trading Standards by way of future regulations; and
  • make future administrative amendments to TTS regulations.

Excise duties

Extending Sch 41, Finance Act 2008 penalties to free zones and registered consignors for authorised use

The excise wrongdoing penalty regime will be extended with effect from 3 November 2021 to include breaches relating to excise goods that occur in the free-zone procedure or the authorised use procedure for registered consignors.

This will allow the Sch 41 penalties to be applied to businesses and individuals who fail to comply with obligations or terms and conditions imposed while goods are subject to the free- zone procedure and authorised use procedure.

Insurance premium tax: identifying where the risk is situated

As announced on 20 July 2021, the criteria for determining the location of risk for insurance premium tax (IPT) will be set out in legislation. This will provide clarity, as well as ensuring that the risks located outside the UK remain exempt from UK IPT.

Following a technical consultation on the draft legislation, amendments were made to ensure continuity of treatment. This measure will have effect from the date of Royal Assent to Finance Bill 2021-22.

Alcohol duties

A consultation has been published on the detailed proposals for alcohol duty reform. This builds on the findings of the previous call for evidence, held in Autumn 2020, the response to which has been published alongside the consultation. The consultation will close on 30 January 2022.

In the meantime, all alcohol duty rates will be frozen. There will be no revisions to existing legislation and no new legal provisions will be introduced.

Tax Faculty

This guidance is created by the Tax Faculty, recognised internationally as a leading authority and source of expertise on taxation. The Faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.

Budget webinar

The Tax Faculty reflected on the Chancellor's announcements in this essential webinar. Freely available, watch the recording to find out what the Autumn Budget 2021 could mean for you and your clients.

Analysis from ICAEW's experts on the Autumn Budget 2021 and the comprehensive spending review published on 27 October 2021.
More on Autumn Budget 2021

Read the rest of the Tax Faculty's summary of the tax related announcements in the Autumn Budget on 27 October 2021.

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