Autumn Budget 2021
Chancellor Rishi Sunak presented his third Budget on 27 October 2021. In his speech, he set out the plans to “build back better” with ambitions to level up and reduce regional inequality.
Although there have been many changes, below we have highlighted those that we believe are most relevant to our clients: Temporary business rates relief; national living wage; the annual investment allowance; and the reporting deadline for capital gains tax.
Temporary Business Rates Relief
Over 90% of retail, hospitality and leisure businesses will receive at least 50% off their business rates bills in 2022/23
Cutting the burden of business rates for all businesses by freezing the multiplier for 2022 to 2023.
Introducing a new relief to support investment in property improvements, enabling occupying businesses to invest in expanding their properties and making them work better for customers and employees. This means that businesses will be spared from paying higher business rates after making improvements to their properties.
Introducing new measures to support green investment and the decarbonisation of non-domestic buildings. This will provide exemptions for eligible green plant and machinery such as solar panels, wind turbines and battery storage used with renewables and electric vehicle charging points, as well as a 100% relief for low-carbon heat networks that have their own rates bill.
Making the system fairer by moving to three-yearly revaluations from 2023.
Providing stability ahead of the 2023 revaluation by extending Transitional Relief and the Supporting Small Business Scheme for 2022 to 2023 to protect small businesses from significant bill increases in the final year of the current revaluation cycle.
National Living Wage
Following the recommendations of the independent Low Pay Commission, the government will increase the National Living Wage (NLW) for individuals aged 23 and over by 6.6% from 1 April 2022. The government has also accepted the recommendations for the other National Minimum Wage (NMW) rates to be increased.
From 1 April 2022, the hourly rates of NLW and NMW will be:
£9.50 for those 23 years old and over
£9.18 for 21-22 year olds
£6.83 for 18-20 year olds
£4.81 for 16-17 year olds
£4.81 apprentice rate for apprentices under 19, and those 19 and over in their first year of apprenticeship.
Business Tax - Annual Investment Allowance
Most corporate and unincorporated businesses are able to utilise a £200,000 annual investment allowance (AIA) to claim 100% tax relief on their qualifying expenditure on plant and machinery. The allowance was temporarily increased to £1 million for expenditure incurred on or after 1 January 2019 and was due to revert back to £200,000 from 1 January 2022. The £1 million allowance will now be retained until 31 March 2023.
For companies, this aligns the end of the temporary AIA with the end of the ‘super-deductions’ as announced by the government in Spring Budget 2021.
Capital Gains Tax
UK resident individuals who dispose of UK residential property are sometimes required to deliver a CGT return to HMRC and make a payment on account of CGT within 30 days of completion of the property disposal.
Non-UK residents are subject to similar deadlines in respect of the disposal of all types of UK land and property.
In both cases, for disposals that complete on or after 27 October 2021, the reporting and payment deadline is extended to 60 days following the completion of the disposal.
