However, with the Chancellor pledging to both spend and reduce the government deficit, thoughts turn to how this will all be funded. In truth, this burden will likely fall on businesses, not least through the scheduled corporation tax rate increase and National Living Wage increase. With many already facing staffing challenges, rising energy and supply chain costs, the decision on whether to absorb or pass on these costs to their customers will inevitably arise – in turn adding to inflationary pressures.
There were some positive measures for the hospitality and leisure sector with regard to business rates reliefs and a radical reform of alcohol duties, which will go some way in buffering the costs and, for some, will be of significant help.
Despite a backdrop of growth being forecast, the Budget gives little doubt that the next few years will be tough as the government seeks to recoup the huge burden of its pandemic spending. For now, it is some saving grace that there were no substantial tax changes for the time being.
We hope that you enjoy reading our highlights and summary guide, and as always, if you have any questions on how any of these measures affect you, please contact us.
Our full summary guide
Download and view our Autumn Budget highlights and full summary guide [5mb] here.
At a glance
1. £20bn extra for R&D investment in addition to R&D tax relief, which is to be expanded to include cloud computing and data costs, but limited to UK domestic R&D, from April 2023.
2.The Annual Investment Allowance (AIA) which provides 100% relief on up to £1m worth of qualifying plant and machinery, second-hand equipment and assets has been extended until March 2023.
3. National Living Wage increasing to £9.50 per hour, increase of 6.6%.
4. Support pledged for the transport industry with new funding for lorry park facilities. HGV levy suspended until 2023 and freezing vehicle excise duty for HGVs.
5. Business Rates Improvement Relief to be introduced from 2023, meaning businesses will be able to make commercial property improvements and pay no extra business rates for 12 months.
6. A 50% business rates discount for companies in hospitality, retail and leisure sectors up to a maximum of £110,000.
7. Tax relief for culture (museums, theatres and galleries etc) due to end in March 2022 now extended to March 2024.
8. The OBR expects the economy to return to it’s pre-Covid level at the turn of the year – sooner than previously stated. Annual GDP growth forecast at 6.5% this year and 6% in 2022.
9. Effective immediately, the deadline for reporting and paying Capital Gains Tax (CGT) after selling UK residential property will increase from 30 days to 60 days after completion.
10. Alcohol duty will be restructured so that all beverages will be taxed in direct proportion to their alcohol content.
Oscar heads our tax department and provides advice on tax structuring, planning and compliance services to entrepreneurs and their businesses.