Budget 2021: “post-Covid economy” begins here28/10/2021
Chancellor of the Exchequer Rishi Sunak unveiled the UK’s Autumn Budget on October 27, hailing it as the beginning of a new “post-Covid economy”. The Chancellor was eager to point out that today’s budget doesn’t “draw a line” under Covid, but that it “delivers a stronger economy for the British people.” Speaking more broadly about the government’s plans to get the economy back on track, Mr Sunak said “Let there be no doubt: our plan is working.”
The Chancellor spoke optimistically about Britain’s improved economic outlook, but noted inflation was also forecast to be higher next year. This, he said, was a global problem that the UK was unable to fix on its own. However, a range of promises such as £5.9 billion for the NHS and an end to the freeze on public sector workers’ pay are designed to help households cope with the pressure. Mr Sunak also made a number of announcements that business owners should be aware of:
Retailers and hospitality businesses get rates relief
Mr Sunak has announced what he calls “the biggest single year tax cut to business rates in over 30 years.”
Starting in 2023, the government will introduce a new revaluation cycle. This is a form investment relief designed to Incentivise the upgrading of business premises, which will last for 12 months. The Chancellor said: “I’m announcing today, for one year, a new 50% business rates discount for businesses in the retail, hospitality, and leisure sectors. Pubs, music venues, cinemas, restaurants, hotels, theatres, gyms.” Eligible companies can claim up to a maximum of £110,000 discount. This, according to the Chancellor, amounts to a business tax cut of almost £1.7 billion.
Mr Sunak also added that the government will be freezing the business rates multiplier for an additional year (22/23), saving businesses £4.6 billion over the next five years.
Alcohol duty changes designed to help pubs prosper
According to the Chancellor, alcohol duties are “full of historical anomalies” as they date all the way back to 1643. In an effort to help the hospitality sector regain economic momentum, he has announced the biggest change to alcohol duties in 140 years.
The UK’s main duty rates on alcohol will now be slashed from 15% to 6%, with higher-alcohol drinks attracting higher duty than lower-alcohol drinks. Venues that serve draught beer and cider will also benefit from a new “draught relief” which cuts duty on these drinks by the most since 1923. A pint of alcohol will be permanently cut by 3p as a result. Small brewers (including cider makers) will also receive relief.
“Levelling up” cities, travel, education and wages
The Chancellor has announced a rise in the National Living Wage from £8.91 to £9.50 an hour from April 2022. This is one of many moves designed to help households bear the burden of rising inflation, but it also has implications for employers with large numbers of minimum wage employees on their books.
He also announced a “levelling up” of towns and cities including Stoke-on-Trent, Leeds, and Leicester that amounts to £1.7 billion in funding. This money will be used to make vital improvements to public property. This goes hand in hand with another announcement Mr Sunak made on Wednesday: increased investment to support “London-style” transport across all the regions of England. Also, in a move that will be popular with airlines, airports, and those who travel for business or pleasure, but has already proven less so with those who keep an eye on the government’s climate change promises, Air Passenger Duty tax will be cut on some domestic flights.
Finally, Mr Sunak has announced £2.6 billion to be spent creating 30,000 new schools for children with special needs and disabilities, £1.6 billion over three years to roll out new “T-levels” for teenagers, and £550 million for adult skill training in England.
What does the budget mean for your business?
If you want your business to prosper in a post-Covid economy, then it is vital to take advantage of all the support available. It is also important to make the most of valuable opportunities. If you need any help understanding the Autumn 2021 budget, or what it means for you and your company, call JW Hinks on 0121 456 0190. Our friendly and professional team of experts have all the tools necessary to ensure you haven’t overlooked anything that has ramifications for your business.
Or you can download our useful guide here.