IFB Responds to Autumn Budget 2021
27th October 2021
Responding to the Budget announcements, IFB's Director of External Affairs and Policy Fiona Graham said:
“The Chancellor’s Budget is a starting point to help small and medium family businesses across the UK build back stronger from the pandemic. The decision to support UK businesses by extending the £1 million Annual Investment Allowance until March 2023, and cutting Business Rates for hospitality and retail, will be welcomed and should encourage investment.
"The changes to Business Rates to support businesses making improvements to their businesses, and take away some of the disincentives to invest in green technologies that currently exist, are both positive developments. We're pleased to see the Chancellor looking at how to make the R&D tax relief system work better, and it's essential that the system work better for SMEs and helps more to innovate and take their next steps on the path to Net Zero.
"Business has had a difficult time over the past 18 months, and there are still many challenges ahead. Today's Budget saw the Government start on the path towards their vision for the future business landscape, and we hope business and Government can work together to deliver growth that benefits everyone across the UK."
- The Business Rates review published today announced more frequent valuations - every three years from 2023
- A new 50 per cent business rates discount in retail, hospitality, and leisure sectors for a year up to a maximum of £110,000
- The Business Rate Multiplier will be frozen for a second year.
- 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. From 2023, every business can make property improvements and for 12 months, will pay no extra business rates.
- The new Green Investment Relief will reward businesses that adopt green technologies and introduction of a business rates improvement relief. 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.
Investment and R&D
- An extension of the temporary £1 million level of the Annual Investment Allowance to March 2023
- Expanding the scope of R&D tax reliefs to include cloud computing and data costs.
- Increasing public investment in UK R&D to £20 billion by 2024-25.
- A new UK-wide numeracy programme – Multiply – will receive £560m for up to 500,000 adults to improve their math skills.
- Increasing apprenticeship funding to £2.7bn in 2024/25.
- National Living Wage will increase by 6.6 percent to £9.50 per hour.
- No changes to Inheritance Tax or Capital Gains Tax
- Announced in September as part of the Government’s announcement on Health and Social Care: Dividend Tax will increase by 1.25 per cent from April 2022, and National Insurance Contributions for working age employees, self-employed and employers will increase by 1.25 per cent
- Clarification of the residential property developer' tax. This tax will apply to developers with profits over £25m at a rate of 4 percent and will raise £5bn per year to be used for the removal of unsafe cladding.
- The Chancellor announced an overall of the alcohol duty system, designed to simplify the tax system and be fairer to producers. The full HM Treasury paper on the changes is available here.