WellTax Blog

Budget 2021: Customs and Excise duties and other indirect Taxes

March 16, 2021

In the recently presented Budget, HMRC has announced the following changes affecting Customs and Excise duties.

Administrative amendment to Vehicle Excise Duty supplement for expensive cars

Owners of cars with a list price exceeding £40,000 currently pay an additional supplement as well as paying the standard rate. The supplement is paid for a period of five years from the start of the second vehicle licence but for a period no longer than six years from when the vehicle was first registered. The vehicle licence end date and the supplement end date can become misaligned because of the vehicle being sold or the vehicle being declared off road (ie it is kept in a garage)

The vehicle excise duty legislation will be amended with effect from the 1st of April 2021 to ensure that registered keepers of cars with a list price of over £40,000 are issued with the correct annual Vehicle Excise Duty refund if they sell their vehicle or make a SORN (Statutory Off-Road Notification) in the last year of the vehicle being liable to pay the expensive car supplement.

Air Passenger Duty rates from 1st of April 2022 to 31st of March 2023

The long-haul rates of air passenger duty (APD) for the tax year 2022 to 2023 will increase in line with the retail price index (RPI) as forecasted in the Budget 2021. Short haul rates will not rise.

The rates will be as follows from April 2022:

Changes to Schedule 3 of Customs and Excise Management Act (CEMA) 1979 for seizure in situ

This measure will allow the goods to be seized and, with the agreement of a responsible person, remain at the place where they are first seized rather than being moved elsewhere. However, it will include a civil penalty for places where goods, seized “in situ” (those kept on the trader’s premises), are removed without authorisation.

Consolidation of Rates into Finance Bill 2021 for Tobacco Duty

An increase to the excise duty rate on all tobacco products took effect from the 16th of November 2020. The increased rates will be consolidated by amending the Table within Schedule 1 of the Tobacco Products Duty Act 1979.

Heavy goods vehicle levy suspension

Collection of the levy was suspended for twelve months from the 1st of August 2020 to support the haulage sector during the coronavirus pandemic. Budget 2021 announced that the levy will be suspended for a further twelve months from the 1st of August 2021. The heavy good levy rates will also remain frozen in 2021 and 2022.

Changes to Landfill Tax rates from the 1st of April 2021

Landfill Tax is charged on material disposed of at a landfill site. It encourages efforts to minimise the amount of material produced and the use of non-landfill waste management options, which may include recycling, composting and recovery. Increasing Landfill Tax rates in line with the retail prices index (RPI) means that Landfill Tax can continue to help the government meet its environmental objectives.

According to this measure, the standard and lower rates of landfill tax will both increase in 2021 and 2022 in line with the retail prices index (RPI), rounded to the nearest 5 pence.

For further information on the new UK Budget 2021, contact us at info@well-tax.com or follow us on our website www.well-tax.com.



Sergio Schittone

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