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Autumn Budget and Spending Review 2021 – How Does the Budget Announcement Impact Your Business? 

October 2021

Yesterday afternoon, Chancellor Rishi Sunak delivered the 2021 Autumn Budget and Spending Review, outlining the government’s spending plans for the next three financial years. We understand you may wonder how the changes announced in the budget will affect your business, so we’ve outlined three key factors that could make an impact.

Houses of Parliament and Big Ben

Taxation

National Insurance

As previously announced in September, the Chancellor highlighted the 1.25% increase in national insurance contributions and dividends from April 2022, in a bid to help fund health and social care costs. However, from April 2023, the NIC increase will then be withdrawn and become a standalone tax, which will then appear as a separate line on employee payslips. You can read more about these changes here. 

Business Rates

As a result of Covid-19’s impact on shops, restaurants, bars and gyms, a temporary 50% discount on their business rates was announced, up to a maximum of £110,000. In addition to this, the Chancellor also announced that 2022’s planned annual increase in rates for all firms would be scrapped for the second year in a row.

Income Tax

Income tax limits and personal allowance will remain at their current level until April 2026. However, wage earners receiving annual pay increases up to April 2026 will be required to pay tax on the full value of any increases. This is because, with personal allowances and the higher rate thresholds frozen until April 2026, any increases in earnings will be taxed and may even push some into higher rate tax bands.

Corporation Tax

The main rate of corporation tax will remain at 19% until April 2023, and will then increase to 25%, with a small profits rate of 19% on profits up to £50,000

R&D tax reliefs are also set to be reformed in an effort to boost innovation, and support the technological advances in the UK. The chancellor has also announced he will expand qualifying expenditure to cover data purchases and cloud computing costs. These changes will be legislated for in Finance Bill 2022-23, and take effect from April 2023.

National Minimum Wage

While increases to the National Minimum and Living wage were announced already by the treasury on the 25th, the Chancellor officially announced these changes yesterday. Effective from the 1st April 2022, the changes to the National Minimum Wage are as follows:

Year23 and over21 to 2218 to 20Under 18Apprentices
April 2021£8.91£8.36£6.56£4.62£4.30
April 2022£9.50£9.18£6.83£4.81£4.81
Increase59p82p27p19p51p

Housing

A multi-year investment of nearly £24 billion for housing was announced by the Chancellor, this figure includes:

If you have any queries, or would like to discuss how the budget may affect your business, then please contact us and one of our friendly experts will be in touch.

Source: gov.uk/government 

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