Posted November 2, 2021

2021 Autumn Budget

As part of the autumn budget the Chancellor announced, “growth up, jobs up, and debt down”.

The Chancellor presented a positive outlook for the coming year and set out his plans for the economy post COVID.

Despite this being a budget “backing businesses”, there was very little in the budget that will affect our clients.

The budget announced large spending increases for the public sector, with education, justice, transport and the NHS getting additional funding as well as major government backed projects across the UK as part of the levelling up plans.

The main tax implications for businesses and employees were announced prior to the budget.  In September, the Chancellor announced that National Insurance, s455 tax and dividends tax will increase by 1.25%.  The impacts on small businesses announced in this budget are:

Recovery Loan Scheme

The Recovery Loan Scheme will be extended until June 2022, this was previously due to end on 31 December 2021.  Finance will be available up to a maximum of £2m, although the government guarantee will be reduced from 80% to 70%.

R&D Tax Relief Changes

R&D tax credit will be altered to include cloud computing and data costs in R&D tax credit claims.

Currently companies can claim R&D tax credits on development undertaken outside the UK, this will be restricted.

Both of these changes will take effect from April 2023.

Creative Sectors

The current tax relief available to museums and galleries which is currently due to end in March 2022 will be extended to March 2024.  In addition, the support available to theatres, galleries and museums will be doubled until April 2023.

Business Rates

The delayed revaluation review will now go ahead in 2023 and revaluations will now occur every 3 years from this date.

A 50% reduction of business rates will be available to business in the retail, hospitality and leisure sectors.  This will be available for the 2022/23 tax year and up to a maximum relief of £110,000.

A new investment relief will be available to businesses who make improvements to their property.  No additional rates will be incurred on these improvements for 12 months, this new relief will being in 2023.

Capital Allowances

The £1m Annual Investment Allowance is being extended until March 2023.

National Minimum Wage Increases

The national minimum wage will increase from April 2022 as follows:

National living wage (for employees over the age of 23): £9.50 per hour

Aged 21-22: £9.18 per hour

Aged 18-20: £6.83

Apprentices: £4.81

If you have any queries on this years budget, or would like to discuss how it affects you or your business please contact one of the Whitesides team on 0113 258 2437.