On Wednesday 27th October, Chancellor of the Exchequer Rishi Sunak delivered the Autumn Budget 2021. In this article, we’ll be taking a look at some of the key points made and what this might mean for your business.
The Autumn Budget: ‘A Stronger Economy for the British People’
1. 50% Discount On Business Rates
In an attempt to support businesses and “create stronger high streets”, Rishi Sunak announced there would be a 50 per cent cut to business rates for the retail, hospitality and leisure sectors in England. This means that for the next financial year (2022-23), businesses will be able to claim a 50% reduction on their business rates, up to a maximum of £110,000.
Additionally, from 2023, there will be a new business rates relief scheme that aims to support investment in property improvements, meaning businesses won’t be faced with higher business rate bills for a year after making ‘qualifying improvements’ to the property’.
These qualifying improvements include a range of green technology such as solar panels, which the government hopes will help power the drive to meet its net zero targets by 2050.
2. Simplifying and Reducing Alcohol Rates
The chancellor has announced he will be simplifying alcohol duty by basing the principle on ‘the stronger the drink, the higher the rate,’.
The main duty rates are set to be cut from fifteen to six and there will also be a new relief for smaller alcohol production companies, including cider and sparkling wine, that develops the existing small brewers relief.
Pub owners will also see a new relief that cuts duty rates on draught beer and cider by 5%, which will take around 3p off a pint, though this won’t take effect until 2023.
The chancellor has said that this is the “biggest cut to cider duty since 1923 and the biggest cut to beer duty for 50 years”. Sunak hopes the cuts will benefit local community pub owners who do 75% of their trade on draught.
It was also revealed that the planned increase in duty on spirits such as wine and whiskey were cancelled from midnight that night.
Unfortunately, many in the hospitality industry feel that whilst these announcements are a step in the right direction, there still remain many issues which have been unaddressed such as rising utility bills, wages, supply chain problems and inflation.
3. Fuel Duty Rise Cancelled
The chancellor announced that fuel duty is to remain frozen at 57.95p per litre UK-wide for the year 2022-23, making this the 12th consecutive year of frozen rates. This means the average car driver will save around £1,900 over the next five years, helping those who drive for business to keep costs down.
4. Recovery Loan Extended By 6 Months
Sunak revealed there would be a six month extension to the Recovery Loan Scheme until 30 June 2022 and businesses can apply for a loan of up to £2 million, 70% of which will be backed by the government.
5. Minimum Wage Increase
From April 2022, there will be an increase to the national living wage and national minimum wage, rising from £8.91 an hour to £9.50 for workers 23 and over. Workers ages between 21-22 will also see an increase from £8.36 to £9.18 and apprentices will get £4.81 instead of £4.30.
6. Angel Investor Scheme
The British Business Bank has launched a Regional Angels Programme, an investor scheme that aims to reduce regional imbalances in access to early stage equity finance for SMEs across the UK. In the Budget, it was revealed that the government is putting £150 million towards the programme in order to make finance more accessible throughout the UK.
Although there were some welcome measures for businesses in the Budget, many were left disappointed with the lack of any big announcements. Some felt that important issues such as the current supply chain pressures and rising energy costs and taxes were avoided, with the Budget measures simply avoiding adding any additional pressure on those still recovering from the devastating impacts of the coronavirus pandemic.