The Government delivered its Autumn Budget yesterday. This is the Government’s second budget in 2021; you can find our rundown of its March 2021 Budget here.
If you want to read the full Autumn Budget, you can access it on HMRC’s website, but to make things easier for you, we’ve rounded up 10 key points that SMEs might want to know about.
1. Increases to the National Living Wage and the National Minimum Wage
In April 2022, the National Living Wage will rise from £8.91 per hour to £9.50 per hour for staff aged 23 and over. In addition, the National Minimum Wage will be increased as follows:
- The rate for 21-22 year olds will rise from £8.36 to £9.18
- The rate for 18-20 year olds will rise from £6.56 to £6.83
- The rate for 16-17 year olds will rise from £4.62 to £4.81
- The apprenticeship rate will rise from £4.30 to £4.81
Our Q&A on Staff pay will help you to understand which of your staff are entitled to the National Living Wage or the National Minimum Wage, and at what rate.
2. Changes to business rates
The Chancellor announced a temporary business rates discount of 50% (up to a cap of £110,000) will be available to businesses in the retail, hospitality and leisure sectors next year. More broadly, the Government intends to freeze the business rates multiplier for the 2022-23 tax year, and is introducing from 2023 a new relief ensuring that businesses will not be charged extra business rates for 12 months after making property improvements which increase its rateable value.
3. Reform of R&D tax reliefs
At the last Budget in March 2021, the Government launched a consultation into the R&D tax relief system. Following the conclusion of this consultation, it has now announced that the reliefs scheme will be expanded to include cloud computing and data costs from April 2023. The Chancellor confirmed that the Government also plans on taking further steps to tackle abuse of the system.
4. Extension of the Recovery Loan Scheme
The Recovery Loan Scheme is being extended until 30 June 2022. Businesses of any size will be able to apply for loans of up to £2 million, with the Government providing 70% guarantees to lenders (reduced from 80%).
5. Launch of new Visas to attract the highly skilled
These will include the launch of a new Scale-up Visa in 2022 to help businesses access highly skilled individuals from abroad. Eligible businesses must be offering a job with a salary of at least £33,000.
6. Continuation of the Start Up Loans Scheme
This Scheme provides mentoring and government-backed loans of £500 to £25,000 to individuals who want to start a business.
7. Increased apprenticeship funding
The Chancellor announced that the Government is planning on increasing apprenticeship funding and will continue to fund 95% of apprenticeship training and assessment costs for employers who do not pay the Apprenticeship Levy. In addition, an enhanced recruitment service will be launched to help SMEs hire new apprentices.
For further guidance about apprenticeships, see our Q&A.
8. Confirmed introduction of the Health and Social Care Levy
The Budget confirms the Government’s previous announcement about a new Health and Social Care Levy from April 2022. This is a 1.25% levy to be paid by employers, employees and the self-employed to fund social care.
9. Planned increase in fuel duty cancelled
The duty will be frozen at 57.95p per litre for 2022-2023.
10. Changes to alcohol tax duties
The Government intends to simplify alcohol duties by cutting the number of main duty rates from 15 to 6 and by ensuring products are taxed proportionally to their alcohol content (ie higher strength drinks will incur higher duties). A new relief will also be introduced for small producers of lower alcohol content products and duty rates on draught beer and cider will be cut by 5%.
Finally, the planned increase in duty rates on beer, cider, wine and spirits will be frozen for the next year.
Before joining Sparqa Legal as a Senior Legal Editor in 2017, Frankie spent five years training and practising as a corporate disputes and investigations lawyer at leading international law firm Hogan Lovells. As legal insights lead, Frankie regularly contributes to Sparqa Legal’s blog, writing content across employment law, data protection, disputes and more.