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Autumn Budget 2021 – Business
Autumn Budget 2021 – Business

 

Business Rates in England

 

The government plans to do the following:

Freeze the business rates multiplier from 1 April 2022 until 31 March 2023, keeping the multipliers at 49.9p and 51.2p.

Introduce a new temporary business rates relief for eligible retail, hospitality and leisure properties for 2022/23. Eligible properties will receive 50% relief, subject to a cap of up to £110,000 per business.

Introduce a 100% improvement relief for business rates. This provides 12 months of relief from higher bills for occupiers where eligible improvements to an existing property increase the rateable value. The Government will consult on how best to implement this relief, which will take effect in 2023.

Introduce targeted business rate exemptions from 1 April 2023 until 31 March 2035 for eligible plant and machinery used in onsite renewable energy generation and storage. A 100% relief for eligible heat networks will also be put in place to support the decarbonisation of non-domestic buildings.

Increase the frequency of business rates revaluations so they take place every three years instead of every five, starting in 2023.

Extend transitional relief for small and medium sized businesses, and the supporting small business scheme, for one year. This will restrict bill increases to 15% for small properties (up to a rateable value of £20,000 or £28,000 in Greater London) and 25% for medium properties (up to a rateable value of £100,000), subject to subsidy control limits.

 

 

Corporation Tax

 

The corporation tax rate will remain at 19% for 2022/23, as previously announced.

The Chancellor re-confirmed the UK's main rate of corporation tax will increase to 25% from April 2023.

A small-profits rate will be introduced for companies with profits of £50,000 or less, which will continue to be charged at 19%. Companies with profits between £50,000 and £250,000 will pay tax at the main rate, but this will be reduced by a marginal relief creating a tapered corporation tax rate.

The calculation and eligibility of the marginal relief will be subject to detailed rules and certain exclusions.

 

 

Employers' National Insurance Contributions (NICs)

 

The Government has legislated a new 1.25% health and social care levy.

In 2022/23 only, employers’ class 1 NICs will increase by 1.25% from 13.8% to 15.05%. From April 2023, the levy will be separated out and will also apply to the earnings of individuals working above state pension age. Meanwhile, the employers' NICs rate will return to its 2021/22 level. The employers’ class 1 NIC secondary threshold has been increased from £8,840 to £9,100 per year from 2022/23.

 

 

Annual Investment Allowance Extension

 

The temporary £1m annual investment allowance that was due to reduce back down to £200,000 on 1 January 2022 will extend until 31 March 2023.

 

 

Company Car Tax

 

As announced at Budget 2020, it was confirmed that the company car tax rates already announced for 2022/23 will remain frozen until 2024/25.

Company car fuel benefit From 6 April 2022, the company car fuel benefit multiplier will increase in line with the Consumer Prices Index (CPI) rate of inflation from £24,600 to £25,300.

 

 

Company Van Tax

 

From 6 April 2022, the van benefit charge and van fuel benefit charges will both increase in line with CPI. The van benefit charge will increase from £3,500 to £3,600 and the van fuel benefit charge will increase from £669 to £688.

 

 

Residential Property Developers' Tax

 

It was confirmed a new tax will be introduced, from April 2022, on the profits that companies and corporate groups derive from UK residential property development.

The tax will be charged at 4% on profits exceeding an annual allowance of £25 million.

 

 

Research and Development (R&D) Relief

 

R&D tax relief reforms will take effect from April 2023, which will expand qualifying R&D expenditure to include data and cloud costs.

Similarly, changes will be made to target abuse, improve compliance and refocus the support towards innovation in the UK, rather than overseas. Further details of these changes will be released at a later date.

 

 

Annual Tax on Enveloped Dwellings (ATED)

 

From 1 April 2022, the ATED annual charges will rise by 3.1%. While there are multiple ATED bands, the lowest ATED charge will increase from £3,700 to £3,800 and the highest from £237,400 to £244,750.

 

 

Diverted Profits Tax

 

From April 2023, the rate of diverted profits tax will increase from 25% to 31%.

 

 

Abolition of Cross-Border Group Relief

 

It was announced that legislation permitting UK companies in certain circumstances to claim group relief for losses in the European Economic Area (EEA) would be repealed.

The measure also amends the legislation that limits the amount of losses that an EEA resident company trading in the UK through a UK permanent establishment can surrender as group relief, to be aligned with the rules with companies elsewhere in the world. This measure will have effect for accounting periods ending on or after 27th of October 2021.

Transitional arrangements will apply for accounting periods which straddle this date. Cultural reliefs From 27th of October 2021, the rates of corporation tax relief that are collectively known as the ‘cultural reliefs’ will be increased.

The rate of relief will increase to 45% or 50% for the theatre tax relief, 50% for the orchestra tax relief and 45% or 50% for the museums and galleries exhibition tax relief. The rates will taper back down from 1 April 2023 before returning to their current levels from 1 April 2024.

The tax relief available for qualifying companies in the museum and gallery sectors has been extended to 31 March 2024.

 

 

Corporate Re-Domiciliation

 

The Government intends to make it possible for companies to move their domicile to the UK and make relocation easier.

 

 

Need More Info?!

 

If you would like a more in-depth summary of the 2021 Autumn Budget, you can read our exhaustive overview here

On the other hand, if you would like more information on a the budget and its various aspects, you can refer to our main blog page, where you will find a summary post on the 2021 Budget, as well as posts covering VAT, personal tax, and duties/other announcements.

 

 

Contact Gow and Partners

 

If you have any queries regarding Sunak’s Autumn Budget, then please do get in touch with our team of dedicated Gow accountants, who will be more than happy to clarify any aspect that you’re unclear on.

Simply call 01254 589799 today.

Alternatively, you can fill in a contact form, or send us an email at info@gowandpartners.co.uk.