The UK Autumn Budget 2021 obviously continues to support and aims to encourage investment in the country, enhancing UK’s competitiveness as a leading global hub for all financial services.

The Government sees another extension of the Annual Investment Allowance (AIA) for qualifying assets and an increase in the scope of R&D, the increase to the corporation tax rate and investment reliefs will likely boost investment from businesses. The increase in funding will surely encourage investments into the financial services sector, particularly for FinTech and Insurtech services.

Effective from 1 April 2023, the Government has announced a cut on the bank surcharge from 8% to 3% which will result in a combined tax rate of 28%. An increase in the annual bank surcharge allowance will increase the profits banks would make before paying their surcharge. This change aims in reducing the impact of increased tax rates in the sector and is intended to have UK’s leading banks to maintain their competitiveness. 

A new elective tax regime has been announced for qualifying asset holding companies (QAHC), which would introduce new measures to its investors, such as exempting gains that allows certain amounts to be considered as non-UK source income. This new regime would attract business in setting up in the country.

The Government also ensures that the UK’s Stamp Duty and Stamp Duty Reserve Tax rules contribute to the said aim. To operate effectively, technical changes will be made.

Number of large institutional investors and UK real estate investment trusts (REITs) are expected to continue to grow, changes to the rules applying to REITs will be made in order to assess and remove anything that is unnecessary, thus making the UK more attractive for the said sector.

The above measures indicate that the UK government strives to protect and develop the financial services sector as well as the asset management industry, making their operations easier.

If you have any queries on this topic, please feel free to contact Cheylesmore Accountants at 02476017778. You may also send an email through info@cheylesmore.com.