Autumn Budget Summary 2021

We’ve sat down and looked closely at the detail of today’s autumn Budget. This summary explains what today’s announcements mean for you and your business.  

Today’s announcements affecting businesses. 

R & D tax relief 

There were no major announcements on R&D tax relief rates for the majority of businesses. However, the Chancellor did set out that R&D tax relief would be expanded to cover cloud computing and data costs.  

WHAT DOES THIS MEAN? Businesses who are more technologically led are more likely to benefit from this change.  

WHAT CAN YOU DO? Talk to our specialist R&D team to understand the new measures and what you could do to maximise your claim.  

Corporation Tax 

Creative Industries tax relief will be doubled from today and will taper down to current rates by April 2025 (this applies to theatre, orchestra, museum, galleries & exhibition tax reliefs only). 

Annual Investment Allowance 

An extension to the £1m Annual Investment Allowance (AIA) was announced, with this being extended from the end of this year to March 2023. 

WHAT DOES THIS MEAN?  This will benefit businesses investing large amounts into capital expenditure, particularly plant and machinery.  

WHAT CAN YOU DO? This will enable businesses to plan future expenditure over a longer period. For businesses looking to invest longer term, there may be opportunity to bring plans forward and benefit from this extension. 

Business Rates 

It was announced that there would be a change in the business rates revaluation cycle from 5 years to 3 years from 2023.  

There will also be a new Business Rates Improvement Relief, meaning that companies that improve or extend their buildings won’t pay any additional business rates in the 12 months after the improvements were made.  

Retail, hospitality and leisure businesses will benefit from a new one year 50% business rates discount from April 2022 up to a maximum of £110,000 for one year.  

WHAT DOES THIS MEAN? There could be winners and losers with the announcement of the new 3 year revaluation cycle. The new Business Rates Improvement Relief will mean that businesses can implement improvements without incurring additional business rates costs.  

Supply Chain

Help has been offered to supply chain issues with the suspension of the HGV levy to 2023 and the freezing of vehicle excise duty for HGV's.

The devil is in the detail. 

We’ve looked closely at the details and within the Treasury’s press releases, there were a couple of items that are also of interest to businesses and individuals, they are: 

• Company vehicles – From 6^th April 2022, the van benefit charge and the car and van fuel benefit charges will increase in line with Consumer Price Index (CPI) for the tax year 2022/23. This means an increase in benefits in kind for employees and an increase in Class 1A NIC for employers. 
• Capital Gains Tax (CGT) – From today the deadline for taxpayers to report and pay CGT after selling UK residential property will increase from 30 days, after the completion date, to 60 days. This is very welcome and should now mean that there is sufficient time to report and to pay the CGT liability.  
  
   

Reminder: Things announced before today’s Budget 

National Insurance 

1.25% national insurance contribution for employees and employers and the self-employed, so a total increase of 2.5% in respect of employed workers (split between the employer and the employee) and 1.25% for the self-employed. 

Corporation Tax 

Corporation tax will also rise from 19 per cent to 25 per cent, from April 2023. In addition, there has been a creation of a small profit rate for businesses with less than £50,000 profit, who will continue to pay corporation tax at 19%. A tapered rate will also be introduced for profits above £50,000. Once profits are above £250,000 the full tax rate of 235 will apply.

National Living Wage Rise 

Already announced - Millions will get a pay rise next year when the National Living Wage is increased from £8.91 an hour to £9.50.  

Apprenticeships 

The apprenticeship hiring levy incentive has been extended until January 2022. From April 2022 the rate for apprentices increases by 11.9% from £4.30 to £4.81 per hour. 

Fuel Costs 

The Chancellor halted a 2.8p rise to fuel duty, this being the twelfth consecutive annual freeze.  

Some of the benefits of today’s Budget were a number of things that were predicted that the Chancellor didn’t announce. This includes the following: 

• No rise in CGT and no reduction in or scrapping of exemptions. 
• No attack on pension allowances or tax reliefs. 
• No changes to IHT. 

To Summarise

The Chancellor didn’t announce any new tax rises or nasty shocks for businesses in today’s Budget, so many business owners may be breathing a sigh of relief. However, this generally neutral Budget is counteracted with the pre-announced increases in Corporation Tax, National Insurance and dividend tax rates. This is also on top of the tax grab last spring when the government froze several key thresholds, exemptions and allowances.  

If you have any questions or would like advice about todays Budget and how it affects you, please contact us at our offices in Wirral, Liverpool and Chester, we'd be happy to help.