It was an unusual budget today delivered by Chancellor of the Exchequer Rishi Sunak; many expected changes in capital taxes and VAT did not materialise. The constant theme of the budget was that of growth and investing in the future to generate revenue for the government, with one of his goals being to reduce taxes by the end of the parliament, emphasising that we are a society that rewards work. The following provides a summary of some of the announcements made:
- The ‘rabbit out of the hat’ was the reduced taper for universal credit. This will be reduced from 63% to 55% no later than 1 December 2021, there is also an increase in the £500 work allowance, both measures mean more money in the pocket of the lowest paid workers. However, the minimum income floor was reintroduced from 1 August over a 12-month period.
- There were lots of changes announced to business rates, including:
- 50% relief for Retail, Hospitality and Leisure sectors in 2022/23 (capped at £110,000).
- Business rates multiplier has been frozen for 12 months from April 2022, meaning the small business multiple will remain at 49.9p and the standard multiplier at 51.2p rather than increasing in line with CPI.
- Relief for Property Improvements – this measure provides 100% business rates relief on qualifying improvements to existing properties for 12 months. Running from 1 April 2023 to 31 March 2028.
- Green Technology relief – businesses investing in green technology will be exempt from business rates on eligible plant and machinery used in renewable energy, this will run from 1 April 2023 to 31 March 2035.
- Annual Investment allowance will remain at £1million until 31 March 2023, it was previously reducing to £200,000 on 1 January 2022.
- Capital gains tax on property disposals will see the deadline for payment increased from 30 days to 60 days from today.
- Museum, Galleries and Exhibition Tax Relief (MGETR) has been extended to 31 March 2024.
- The rate of Theatre, Orchestra and MGETR Tax relief will be doubled from April 2022.
- The HGV Road user levy will be suspended for 12 months from 1 August 2022 to 31 July 2023. Vehicle excise duty will also be frozen for HGVs in 2022/23.
- Both Car Fuel Benefits and Van fuel benefits will increase by CPI in 2022/23.
- There will be major reform to alcohol duty coming into effect from February 2023. The reforms mean that all alcohol duty will be levied based on alcoholic strength, as well as a relief for draught products with ABV less than 8.5% that will benefit the hospitality sector.
- The planned rise in fuel duty is cancelled and fuel duty will be frozen.
- National Living wage is set at £9.50 per hour.
- Finally, there were changes to Air Passenger duty, lowering the rates charged on domestic flights whilst creating a new ultra-long-haul band for journeys over 5,500 miles from London.
If you have any questions on how the above will affect your business, then please get in touch.