28th October 2021Autumn Budget 2021 Summary

This was a Budget set against a backdrop of the national debt. According to the ONS, the UK Government gross debt was £2.2 trillion at the end of the financial year ending March 2021, equivalent to 106.0% of gross domestic product (GDP). By comparison, this is 13.1% above the average of the 27 European Union (EU) member states.

Given this context, the Chancellor had to take a balanced approach to the Budget. The minimal changes announced today for British businesses will hopefully provide them with the certainty and stability they have been craving over the last 18 months.

We have put together a summary of some of the key measures announced this week and will be sharing more detailed guidance throughout the month.

It can be difficult to calculate what the reality of the Budget means for individual circumstances and often a lot of the detail is missed during the Chancellor’s speech. If you would like to have a conversation with one of our partners about how the Budget will impact you and your business, or individual circumstances please do get in touch directly.

Business Rates Reduced

What do you need to know:

• There will be a new, one year 50% Business Rates discount for the retail, hospitality, and leisure sectors
• This is a tax cut worth almost £1.7bn – combined with the Small Business Rates Relief, over 90% of businesses will see a discount of at least 50%
• From 2023, every single business will be able to make property improvements – and pay no extra business rates for 12 months. This includes green improvements

Our take: 

Our Tax team says:

“It has been a challenging 18 months and cash flow is still tight. This is a significant boost for British businesses across the UK who have continued to struggle. We would urge businesses to review these changes and ensure they can benefit in the best way possible.”

International Businesses – Protecting Tax Revenues & Promoting the UK as a Place to do Business

What do you need to know:

Three corporate tax measures were also featured in the Budget today – either in the speech or the tax impact notes – which look to protect UK corporation tax revenues and promote the UK as a place to do business.

• The R&D tax relief regime will be reformed and refocused towards rewarding those who innovate in the UK.  Further details of these changes were not announced and will not take effect until April 2023
• A consultation was published which aims to encourage companies to relocate back to the UK
• Group loss relief rules have been amended, as a result of Brexit, which means that the rules in respect of EEA-resident companies will now revert to being in line with non-UK companies who are resident elsewhere around the world

Our take:

Toby Ryland, Corporate Tax Partner said:

“The Government seems keen to demonstrate positive steps that they can now take post-Brexit, which will enable them to better promote the UK as a great place to do business and protect UK corporation tax revenues.”

CGT Property Payment Window Doubled

What do you need to know:

• Capital Gains Tax (CGT) returns and payment deadlines for residential property transactions have been extended from 30 to 60 days
• Both UK and non-UK residents are included in the tax deadline
• The process involves setting up a UK Government Gateway account, potentially authorising an agent, and calculating the taxes due before making the report by the deadline
• The fine for not filing the return within 30 days of a residential property sale was £100, and after six months this fine jumped to 5 per cent of the tax payable

Our take:

Tim Walford-Fitzgerald, Private Client Partner said:

“In the small print announced in the Budget today, for those selling UK residential property the deadline to file a tax return will be extended from 30 days to 60 days from midnight tonight. This is welcome news and it is positive to see that the Chancellor has recognised the reality of these transactions. To anyone selling a property and concerned about the tight deadlines to receive registration, authorise agents and prepare tax computations, you can breathe a little easier.”

Alcohol Tax Cuts & Support for Hospitality Businesses

What do you need to know:

• There will be a tax cut to sparkling wine, draught beer and cider
• Small brewers tax relief introduced for alcohol less than 8.5%
• Planned increases on duty for hospitality businesses have been cancelled from businesses tonight

Our take:

Russel Nathan, Head of Hospitality said:

“This is welcome news for the arts, culture and hospitality industry which were arguably one of the most impacted industries by the various Covid lockdowns. Forced to close and open again on such short notice, with huge negative impacts to employees and business owners. This relief will go some way to helping this industry continue to recoup the negative impacts the pandemic has had on their businesses.”

Tax Relief for the Arts Sector

What do you need to know:

• The tax relief for museums and galleries that was due to end in March next year will be extended by two years to March 2024
• This is a tax relief for culture worth almost a quarter of a billion pounds
• The budget also allocates finances to celebrate the United Kingdom, hoping to promote shared values, culture and institutions. This includes funds such as those for the Queen’s Platinum Jubilee event in 2022

Our take:

Carol Rudge, Head of Not for Profit said:

“It’s great to hear that the tax relief will be extended. This will play an important role as the sector begins to recover and rebuild following the Covid pandemic.”

If you have any questions about how the Autumn Budget might impact you, please get in touch.