Chancellor Rishi Sunak, Autumn Budget speech 2021

Chancellor Rishi Sunak, Autumn Budget speech 2021

Chancellor Rishi Sunak made his Autumn Budget 2021 speech on 27 October 2021, the highlights of the speech are as follows:

  • The minimum wage will rise from £8.91 to £9.50 per hour from April 2022.
  • Universal Credit taper to be reduced by 8% by 1 December 2021.
  • Creative tax reliefs to be extended to April 2024 and doubled until April 2023.
  • Scope of R&D relief to be expanded to include cloud computing and data costs with additional relief for UK only R&D from April 2023.
  •  £1m Annual Investment Allowance (AIA) extended to March 2023.
  • Bank levy to reduce to 3% meaning the rate of Corporation Tax on banks will increase from 27% to 28% in 2023.
  • New Small Producer Relief as an extension of Small Brewers relief, and new ‘Draft relief’ to apply to draft beer and cider from February 2023.

Inflation has hit 3.1%. Growth predictions are revised up from 4% to 6.5%. It is forecast that the economy will return to pre-COVID levels by the turn of the year.

Unemployment to peak at 5.2% which means there will be over 2 million less unemployed than expected. Wages have grown by 3.5% since 2020.

A budget for a new economy post COVID. 

The Office of Budget Responsibility (OBR) is to have a New Charter going forward:

  • Net debt to be a % of GDP.
  • In normal times the government to only borrow to invest with other financial needs being met through taxation.

HGV driver shortages

  • New funding for lorry park facilities.
  • HGV levy to be suspended until 2023 and VED frozen for HGV’s.

Government spending: levelling up public services

  • Healthcare spending to be increased by £44bn to £177bn.
  • Grant funding being provided to local government of £4.8bn.
  • £4.7bn to go to schools by 2024/25, £1,500 per pupil.
  • Additional funding from £1.7bn levelling up fund for projects in Scotland, Wales, NI as well as all regions in England. 
  • £560m on youth services.
  • £5bn for road maintenance and £5bn for buses, cycling and walking.
  • £20bn on R&D by the end of this parliament, on top of the cost of R&D tax relief.
  • £560m for new numeracy programme for children, ‘Multiply’.

Businesses

Creative tax reliefs

  • Extended by two years to March 2024 and doubled until March 2023.
  • £800m of additional funding for museums, galleries etc.

R&D tax relief

  • Scope to be expanded to include cloud computing and data costs.
  • From April 2023 additional relief for UK only R&D activities.

Tonnage tax

  • To reward companies for adopting the UK merchant shipping flag for the first time ever.

Air Passenger Duty (APD)

  • The return leg exemption be brought back for UK domestic flights from April 2023 with a lower rate of APD. Higher rates for long haul flights.

Corporation Tax (CT)

  • Increase in rate to 25% from April 2023 already announced.
  • Bank levy reducing to 3% from April 2023. Overall rate of CT on banks to increase from 27% to 28% in April 2023.

Capital allowances

  • £1m Annual Investment Allowance (AIA) extended to March 2023.

Review of business rates

  • More frequent revaluations every three years.
  • New investment relief for green technology.
  • New business rates improvement relief.
  • Additional 50% discount for 2022 for the hospitality and leisure sector.

Individuals

  • The national living/minimum wage will rise from £8.91 to £9.50 per hour from April 2022.
  •  Universal credit taper to be cut by 8% by 1 December 2021.

Misc duties

  • Alcohol duty simplification, 6 rates instead of 15. ‘The stronger the drink the higher the rate’.
  • There will be a new ‘Small producer relief’, an extension of small brewers relief.
  • New relief, ‘Draft relief’ to apply to draft beer and cider. Will cut duty by 5%.
  • Planned duty increases on spirits cancelled and sparkling wine duty reduced to match that for non-sparkling wines.
  • Planned rises to fuel duty scrapped.

Meer & Co
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