Budget Hub

The Chancellor of the Exchequer, Rishi Sunak presented the latest UK Autumn Budget on Wednesday 27 October 2021.

Our Budget Hub contains insights and publications to help you digest the latest announcements and guide you through the financial measures that affect you.

Budget summary

Throughout the pandemic, the government has been paying out unprecedented amounts of support to employers, businesses, and self-employed people to protect the economy from collapsing. This is at the same time as incurring all the costs of supporting the health system through its greatest crisis. We have been waiting for the bill to arrive – the tax increases that will pay for it all.

Instead, the Chancellor spent most of his speech spreading more money to every corner of the United Kingdom. Although he started by saying ‘we have challenging months ahead’, he moved rapidly on to what he called ‘an economy fit for a new age of optimism’.

This Autumn Budget booklet summarises the most important points and explains how they affect businesses and individuals. At the back of the Summary you will find a calendar of the tax year with important deadline dates shown.

We recommend that you review your financial plans regularly as some aspects of the Budget will not be implemented until later dates.

Budget reactions

Our team have provided their initial reactions to the budget announcements.

Comments

Construction and Real Estate

The Chancellor reconfirmed the introduction of a ‘residential property developer tax’ as part of its measures to address unsafe cladding. This will apply to residential property developers from 1 April 2022, charging profits above £25 million per year at 4%. Plans were also announced for a new £1.8 billion fund to support residential development on brownfield land across the UK, which is expected to support the construction of up to 160,000 new homes on brownfield sites.

We also welcome the business rate improvement relief, which will allow businesses to make property improvements without facing increases in their business rates for up to 12 months.

Rachel Pearce, Partner

Manufacturing

With the manufacturing sector under a lot of pressure currently particularly in terms of energy costs, it was disappointing that the Chancellor didn’t introduce any measures, even on a temporary basis to ease that burden, either through a VAT reduction or changes to the Climate Levy charge. That said there was some good news for those manufacturers who are involved a level of innovation. The government is trying to modernise the Research and Development tax relief system and will be increasing R&D spending to £20bn a year by the end of this parliament in 2024. The first step in this process is that from April 2023, R&D tax reliefs will be reformed to support modern research methods by expanding qualifying expenditure to include data and cloud costs.

Further details are to be published about territoriality restrictions on R&D relief which will include appropriate safeguards to ensure that overseas R&D that is integral to the development of the innovation remains eligible for relief.

Andrew Neuman, Client Service Director

Agriculture and Vineyards

The Chancellor recognised that the past decade has seen a sizeable increase in the consumption of sparkling wine. Therefore as of February 2023, the current duty of 28% on sparkling wine is to be cut to match that of still wines of equivalent strength, wherever they are produced.  This will mean a saving on average of 63p a bottle. This reduction is great news for our vineyards and wineries and will allow them to focus on investing in production and long term growth. Until these changes come into effect, the planned increase in duty on wine and other alcoholic beverages is to be scrapped, putting a freeze in place on the current duty rates.

John Billings, Senior Partner, Head of Agriculture and Vineyards

Education

On the face of it there seemed to be good news for the sector, with the news that funding will increase by over £1,500 per pupil over the next 3 or 4 years. However, the fact that, in real terms, this only puts schools back to where they were in 2010 shows us the challenges they have faced over the past decade – and it is worth noting that funding in 2010 was 9% below its level of 2009! When we factor in the impact on teachers’ salaries of the removal of the public sector pay freeze it is easy to understand why the reaction from educational leaders, as well as the Institute of Fiscal Studies, was cool.   

Robin Evans, Partner, Head of Academies

Healthcare

The Chancellor also announced an extra £5.9bn for the NHS mainly for equipment and infrastructure. This funding will in theory help with the backlog of operations but it still remains to be seen how quickly they can recruit additional doctors and nurses. Apart from that the Chancellor seemed to think that our health will be better if we drink more in the pub rather than at home!

Jeff Huggins, Head of Healthcare

Motor Retail

Clearly motor dealers are facing some significant challenges at the moment, not least COVID recovery, Brexit logistics, and supply issues through the shortages in semi-conductors. Whilst this Budget doesn’t necessarily address all of these issues, it does give some welcome relief in other areas that will help dealers’ profitability and ability to invest in premises. These are primarily in the form of Business Rates relief and extension of the current £1m Annual Investment Allowance until March 2023. The freeze on fuel duty and the £620m investment in zero emission vehicle grants and charging infrastructure should help continue building drivers’ confidence in EV’s and maintain the momentum towards greener vehicles – this should help bring customers back to dealerships and perhaps make customer behaviour a little more predictable

Chris Reeves, Head of Motor Retail

Retail

The Government announced that an eligible business will be able to claim a discount of 50% on their business rates. This will mean any business who is eligible will be able to claim a discount up to a maximum of £110,000. A real lifeline for some retail businesses who have suffered a tough 18 months. Around 90% of businesses across the sectors will benefit from this.

Mark McDowell, Head of Retail

Get in touch

If you would like more detailed one-to-one advice on any of the issues raised in the Budget, please fill in the form and a member of our team will be in touch.