The Chancellor announced a further measure in the Spring Statement building on those announced in the Autumn Budget supporting small businesses recovering from the impact of the pandemic. Interestingly the Chancellor’s speech and subsequent published material has been silent on the proposed increase in corporation tax to 25% from April 2023, this may mean that the Government is reserving judgement on this until they have more financial data.
New measures announced:
- the employment allowance will increase from £4,000 to £5,000 from April. This allows eligible employers to reduce their Class 1 secondary National Insurance contributions liabilities.
- An acceleration of business rates exemption for green technology by one year, now commencing April 2022.
- An acceleration of 100% business rate improvement relief for 12 months for businesses investing in low carbon heat networks, now commencing April 2022.
Measures confirmed were:
Business Rates
- For 2022/23 only, businesses in the retail, hospitality & leisure sectors can claim a temporary 50% discount on their annual business rates, up to a maximum of £110,000 per business.
- Freezing of the business rates multiplier until 31 March 2023 for all businesses. The multiplier is currently 51.2p for standard businesses and 49.9p for small businesses (small business multiplier applies to properties with a rateable value of less than £18,000).
- Small business rate relief will apply for businesses with a property whose rateable value is less than £15,000.
- From 2023 the current system will be modernised such that there are more frequent revaluations so that they take place every three years instead of every five years, to better reflect current market values.
Capital Allowances
- Annual Investment Allowance (AIA) to remain at £1 million until March 2023. The AIA had been due to reduce to £200,000 on 31 December 2021.
- The Super Deduction of 130%, which applies to expenditure incurred on plant and machinery will remain in place until 31 March 2023.
This article is a part of our dedicated Spring Forecast Statement hub. For more analysis and insight, please click here.
