Summary of the key points from the Chancellor’s Autumn Budget 2021
Business Rates From 2023 there will be more frequent revaluations. These will now take place every three years. Investment relief will be introduced to encourage business to make green improvements, with plant and machinery used onsite for renewable energy to be exempt from business rates altogether until 2035. From 2023 every business will be able to make property improvements and for twelve months pay no extra rates. Retail, Hospitality and Leisure relief, with over 90% of businesses in these sectors to receive a 50% reduction in their rates bill. A freeze in the Business Rates multiplier in 2022-23. Corporate Taxation The £1million investment allowance to be extended until March 2023. Planned changes/increases to corporation tax previously announced to go ahead. Research and Development Research and development relief to be expanded to include data and cloud costs. New requirements will be brought forward to try to focus investment in the UK. Alcohol Duties There will be wide reforms of alcohol duties (this has actually caused a slight bump in shares for large pub chains just after the Chancellor’s announcement). The number of main rates will be reduced from fifteen to six, with taxation levels based around the strength of the beverage. A small producers relief will be introduced from small brewers producing drinks with less than 8.5% ABV. A full consultation on these reforms will be run by Government. Duties on draft beer and cider are to be cut by 5%. Motoring Fuel duty will be frozen and the HGV levy will be suspended for a further year. Minimum Wage and Universal Credit The living wage is to increase to £9.50 an hour from April 2022. The taper rate in Universal Credit (UC) will reduce from 63% to 55%, as well as the work allowances in UC increasing by £500 a year. Inflation Inflation is forecast to reach 4% over the next year. The Chancellor noted that this was a global problem and does not have a simple solution. Growth Growth forecasts are better than expected. The OBR expects GDP to grow 6.5% this year and 6% next year. The damage caused by COVID-19 was expected to result in a 3% overall hit to the UK economy. This has now been revised to 2%. Underlying debt is forecast to peak at 85.7% of CPD in 2024. This year it is expected to be 85.2%. |
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