Autumn Budget 2021

The Autumn Budget 2021 was announced on the 27 October by the Chancellor, Rishi Sunak, alongside the Spending Review.

This Budget announced a series of tax measures to help businesses recover from the continuing COVID pandemic and help build a ‘stronger economy for the British people’.

The High Street and Hospitality & Leisure sectors received significant tax cuts and investment incentives. UK infrastructure and housing also benefited from additional funding for new construction and development projects.

Changes to improve R&D tax relief was also announced by the Chancellor and a move to incentivise carrying out research and development in the UK.

Keep an eye on our channels as our Tax Partners pull apart the key details of the speech and how they will impact you and your business.

The Autumn Budget 2021 – Reactions

Our Tax Specialists deliver their reaction to the Autumn Budget 2021 through our series of short Great Conversations videos below. Discussing all the key tax and sector measures that was announced also what was missing from the Chancellors speech.

Following the Chancellors latest Budget our Tax Specialists have reviewed all the key announcements and have pulled together our top 10 key points that will impact you and your business.

10 Key Points from the Autumn Budget

Post-Budget Commentary

Good day for SMEs as costs are cut and access to finance is bolstered

It was a good budget for the UK’s SMEs as business rate relief and bolstered access to financing should help them through the winter.

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Autumn Budget 2021 and travel sector

Despite the Chancellor’s changes to Air Passenger Duty (APD), the travel sector will be highly underwhelmed with the contents of the budget statement.

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National Living Wage & Universal Credit

The national living wage will see a 6.6% rise from 1 April 2022. The new rate will increase by £0.59 per hour above the current rate to £9.50 per hour. The national living wage is the statutory minimum wage payable to workers aged 23 and over. For a full-time worker, this will equate to a pay rise of over £1,100 per annum.

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Increase in Annual Tax on Enveloped Dwellings (ATED)

ATED is set to increase by 3.1% from 1 April 2023. For companies owning residential property valued at £500,000 to £1,000,000, this will mean an increase in the tax from £3,700 to £3,815. The tax on properties in higher bands will also be increased.

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Basis Period Reform

In a move to rapidly transition to the long-held government aim of Making Tax Digital (MTD) for income tax, a proposed change to the way profits are taxed for unincorporated businesses that do not use a 31 March or 5 April accounting year-end will be introduced. 

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Corporation tax increase

There were very few changes to corporation tax. The Annual Investment Allowance has been extended to 31 March 2023, and certain details of the Research and Development (R&D) Tax Relief has been amended. Increases to the rates of tax were announced in the March 2023 Budget and no further announcement has been made. The rate of tax on overdrawn director’s loan accounts will also increase.

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Theatre, Orchestra & Museum Tax Relief

The rates of Theatre Tax Relief, Orchestra Tax Relief and Museum and Galleries Tax Relief will be temporarily increased from 27 October 2021. The increased rates will apply until 31 March 2023.

These reliefs provide an enhancement of corporation tax deductions on expenditure incurred by companies on eligible productions or exhibitions.

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Annual investment allowance extended for a year

The Annual Investment Allowance (AIA) will remain at £1 million until 31 March 2023.

The AIA had been due to reduce to £200,000 on 31 December 2021. This enables 100% capital allowances to be claimed on most items of plant and machinery, including commercial vehicles, software and equipment.

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 Introducing the Building Safety Levy

In his Autumn 2021 Budget, the Chancellor confirmed the introduction of a 4% residential property developer tax for companies or groups of companies with profits of £25 million or more.

The new tax is called the ‘Building Safety Levy’ and will be used to fund the government’s £5.1 billion package to replace unsafe cladding on high-rise buildings in England.

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Autumn Budget 2021 and Manufacturing

The Chancellor missed a trick by failing to address long standing issues blighting the manufacturing sector including supply chain issues and freight costs.

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Pre-Budget Commentary

Autumn Budget 2021 – Sector Wishlist

In this exclusive article, our experts give their views on the UK’s economic outlook, some of the changes expected to be announced in key sectors, and their potential impact on rebuilding the economy in a post-Brexit, and post-pandemic environment.

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Pre-Budget Comment for the Construction & Real Estate Sector

Despite a challenging backdrop, there are several measures that the Chancellor could announce to support one of the UK’s largest sectors.

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Pre-Budget Comment for the Manufacturing & Engineering Sector

For the manufacturing and engineering sector challenging times lie ahead, but there are measures that could help.

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Pre-Budget Comment for the Hospitality and Tourism Sectors

The UK tourism and hospitality sector is screaming for help and the Chancellor needs to not only listen, but more importantly act to support businesses recover from the pandemic.

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Pre-Budget Comment for the Travel Sector

Ahead of the Autumn Budget on 27 October, much of the travel sector remains on life-support due to the Covid-19 pandemic. The Chancellor needs to stand shoulder-to-shoulder with the sector to deliver crucial tax cuts and training incentives.

Read more here

Find out more

If you would like further guidance or to discuss in more detail how this Budget may impact your business, please contact one of our specialists at your local MHA member firm