October 2021 Budget - Key Points
Updated: Nov 2
The Autumn budget has just been delivered, and despite a lot of talk about the economy recovering (the UK economy is now expected to grow by 6% in 2022, and 2.1%, 1.3% and 1.6% over the next three years) there was little by way of substance to allay the immediate concerns over rising inflation (tipped to hit at least 4%), soaring energy prices and supply chain issues, which although said to be easing will likely not be resolved for months.
Indeed aside from some relief for the hospitality sectors, there was relatively little to report in terms of business and personal tax. Indeed the increases to NI and dividend tax announced over a month ago seemed to have already taken some of the steam out of the main announcements.
The Key points
From a business perspective the key takeaway was the extension of the £1 Million Annual Investment Allowance, due to end in December, but will now carry through to March 2023.
Planned Corporation Tax rise to go ahead as planned
There is a new 50% business rates discount for businesses in the retail, hospitality and leisure sectors, including pubs, music venues, cinemas, restaurants, hotels, and gyms, which will last for 12 months.
There will be no increase in the business rates multiplier next year
Planned rise in fuel duty will be cancelled, meaning that - after 12 consecutive years of frozen rates, the average car driver will save a total of £1,900
National living wage to increase next year by 6.6% to £9.50 an hour. For a full time worker, that's a pay rise worth over £1,000 Reduction in the rate of the Universal Credit Taper - currently 63%, so for every extra £1 someone earns, their universal credit is reduced by 63p. The plan is to cut this by 8 percentage points (from 63% to 55%). This will come into effect "within weeks"
Work allowances being increased by £500 - combined with the change to the taper, this is a tax cut worth more than £2bn.
An overhaul of alcohol duty, cutting the number of main duty rates from 15 to six - the stronger the drink, the higher the rate
Small producer relief will extend the principle of small brewers' relief to small cider makers and others making alcoholic drinks of less than 8.5% ABV
Sparkling wines will pay the same duty as still wines of equivalent strength, rather than the 28% they currently pay. Duty will also be cut for fruit cider
We'll issue more detailed guidance in due course once we have had time to fully review today's budget. As ever should you have any specific queries please do not hesitate to get in touch.