Autumn Budget Review 2021: The Reaction
08 Nov 2021
Last week, the Chancellor of the Exchequer presented his budget and spending review for Autumn 2021.
Following another year of financial fragility and disruption due to Covid-19, Brexit and other issues, businesses up and down the country were keen to see what support measures may potentially be just around the corner.
With COP26 looming in the background, it had been anticipated that there may have been a number of ‘green’ incentives announced but there were surprisingly few of these.
Instead, Rishi Sunak announced an extension to the Recovery Loan Scheme, a plan to create stronger high streets and an increase in the minimum wage.
Here are the key points for businesses to take note of:
An extension to the Recovery Loan Scheme
As we at Custom Business Finance predicted a couple of months ago, the Recovery Loan Scheme has been extended beyond the 31st December 2021 deadline.
The Chancellor has announced that the scheme to help businesses find their feet after being financially impacted by Covid-19 will now accept applications until the 31st June 2022.
There are a few caveats to this, however. The following changes will be applicable to any applications made from 1st January 2022 onwards:
- A maximum of £2million will be able to be borrowed per business, a reduction from up to £10million per business
- The government guarantee of funds being borrowed will reduce from 80% to 70%
With this in mind, if you haven’t done so already, please get in touch as soon as possible and we can help you take full advantage of the scheme prior to the changing conditions coming in to affect.
High street business rates slashed in half
It’s good news if you own retail, hospitality and leisure businesses!
We know that you’ve been one of the hardest sectors hit by the pandemic so you will be pleased to know that, for the next financial year, you will be able to claim a 50 per cent reduction in 2022-23, up to a maximum of £110,000.
The biggest single-year tax cut to business rates in over 30 years will hopefully go some way to providing a bit of welcome relief to businesses in this sector.
Minimum wage is going up
It’s been well documented over recent weeks that the cost of living is going up due to rising fuel and food costs.
Employees will be pleased to see that, from 1 April 2022, the new national living wage rate will rise from £8.91 an hour to £9.50 for workers over 23 years old.
The rate for the national minimum wage will also go up. People aged 21-22 will see an increase from £8.36 to £9.18, and apprentices (aged 16 and over and not in full-time education) will get £4.81 an hour, up from £4.30.
Good news for employees but potentially concerning news for businesses who are already wrangling with increasing operating costs and associated costs to recovering from the pandemic.
Freeze on fuel duty
The anticipated price hike on fuel duty has been frozen for another year – which is good news for those of you who rely heavily on driving for your business to operate.
The duty will remain at 57.95 pence per litre UK-wide for 2022-23.
Alcohol duties to reflect alcohol percentage
If you work in pubs and bars, you will also be pleased to hear that alcohol duties have been cut and simplified.
The duties placed on drinks will now reflect the percentage of alcohol simply equating to the strong the drink, the higher the duty.
If you’re an independent brewer, there will also be a new relief coming into play very shortly building on the existing scheme that’s in play.
Lastly, from 2023, draught beer and cider will be subject to a 5% decrease in rates taking 3p off a pint.
Despite the possibility that the economy will have recovered to pre-pandemic levels by the start of 2022, it feels like it could be another tricky year for businesses to operate in.
However, amongst the headline figures, there are still some brilliant options available to you to help you grow your business and navigate these testing economic conditions, including a National Insurance rate increasing by 1.25% in April 2022.
At Custom Business Finance, we are able to help you find the best deals, rates and opportunities on the market. We take your business personally and love being part of your growth journey. If you have any questions on the budget or how you can take advantage of the extension to the RLS, please get in touch.
0114 442 8008