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The Autumn Budget 2021 “A New Economy”

Inflation up to 3.1% due to demand for goods increase over supply, and global demand for energy (Coal, Gas, Oil) has doubled prices in the last year. Inflation forecast to be 4% next year.

State of the Economy

  • HGV levy frozen until August 2023 and freezing Vehicle Excise Duty.
  • £500 Million support fund for household support scheme to help working families
  • Growth revised from 4% to 6.5% for next year
  • Unemployment expected to peak at 5.2% 
  • Wages are rising by 3.5%
  • Business investment is up
  • Covid left us with borrowing at its highest since the Second World War
  • All future government debt to only be incurred for investment and growth
  • Everyday spending met through taxation
  • Borrowing forecast to fall as measured against GDP (See note 1) – Borrowing and debt down.

Education and Recreation

  • £300 million start for life program to cover more nursery support, training, holiday activity and food programmes
  • £4.7 billion for schools by 24/25 to increase per pupil spending by over £1,500
  • Tripling the amount for children with special educational needs and disabilities to create 30,000 new school places.
  • £550 Million for youth services – for football pitches and new pocket parks 
  • £800 Million to protect Libraries and Museums – Tax relief to be extended to March 2024.
  • Tax relief for Theatres, Orchestras, Museums and Galleries will be doubled until April 24 

Research & Development

  • £20 billion for Research & Development
  • Innovate UK budget doubled to £1 billion
  • R&D Tax Credits to be expanded to include cloud computing and data costs
  • More investment in UK Infrastructure (Roads, Railways etc)

Travel Taxes

  • Reform of Tonnage Tax Regime to make it fairer 
  • Air Passenger Duty – Between UK countries to be reduced by half.
  • Long Haul Air passenger (Flights over 5,500) will have an economy rate of £91

Corporation Tax 

  • Annual Investment Allowance of £1 million will be extended to March 2023
  • Previously announced changes in Corporation Tax from 19% to 25% (Marginal increases based on profits) from March 2023, however the super deduction announced previously means your company can claim back up to 25p for every pound you invest in ‘qualifying’ machinery and equipment for two years from 1st April 2021 
  • For Banks the tax surcharge of 8% will be cut to 3% meaning an effective rate of tax of 28% (25% + 3%) as opposed to 27% (19% + 8%) previously.

Business Rates  

  • From 2023 every business will be able to make property improvements and will not have to pay increased rates.
  • The rating multiplier used in calculating business rates will not be changed next year
  • 50% Business rates discount for business in the Retail, Leisure and Hospitality Sector.

Alcohol Duty

  • Radical Simplification
  • Main duty rates changed from 15 to 6 
  • The stronger the drink the higher the rate
  • Lower alcohol drinks will mean less taxes
  • Small producers relief changed
  • Same duty for sparkling wines as still wines 
  • “Our Pubs” – Draft Relief, lower rate of duty to be introduced (Over 40 litre containers) 
  • 5% cuts in Duty
  • Applicable from 2023
  • No Increase on duty for Spirts / Wine / Cider and Beer cancelled from midnight tonight

Fuel Duty

  • Planned rise in fuel duty to be cancelled

National Living Wage

  • National Minimum Wages increasing to £9.50 per hour from April 2022
  • Public sector workers pay to be reviewed and promises Fair Pay Rises

Universal Credit Taper

  • Rate is currently 63%
  • To be reduced by 8% to 55%
  • Increasing the work allowance by £500
  • To be introduced no later than 1st Dec 2021

Help to Grow

Take a look at the following for help with investment in Management Programmes and Digital Technology.

https://helptogrow.campaign.gov.uk

Note 1

Gross domestic product (GDP) is the monetary value of all finished goods and services made within a country during a specific period. GDP provides an economic snapshot of a country, used to estimate the size of an economy and growth rate. 

Please contact us if you have any queries on the above

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