AIMS Accountants – October Budget Update

The Autumn Budget 2021 has been announced and there was much speculation in the press and several leaks about what might be included in today’s budget. It has now been officially announced and we have summarised all the details for you.

We’ve summarised the things you would expect us as accountants to support you with, and much of this Budget was not in that category – we were actually surprised by how little there was!

There were hardly any tax announcements that could affect your business as these had already been set out in the Spring Budget.

Capital Allowances – The temporary increase in the rate of AIA to £1,000,000 from 1 January 2019 was due to end on 31 December 2021, however it has been announced now that it will be extended to March 2023.

Changes that affect SMEs

The National Minimum wage – will increase next year from £8.91 to £9.50 an hour for over 23-year-olds. This will increase the wage of a full-time worker, on the national minimum wage by £1000 a year.

Business rates – During the announcement, the UK business rates system is set to become ‘fairer and timelier’, and in addition it was announced that there will be other measures to support SMEs, and they include:

1. More frequent valuations, one every three years.
2. Business Rate Improvement Relief, firms will be able to make property improvements, and, for 12 months, pay no extra business rates.
3. Next years planned increase will be cancelled.
4. For one year, a new 50% business rates discount for businesses in the retail, hospitality, and leisure sectors”. Worth up to a maximum £110,000 and only applies to England at this stage. Wales and Scotland may follow suit but not yet clear.

National Insurance reminder – As announced earlier this year, the Health and Social Care Levy is being introduced first as an increase national insurance of 1.25% for the April 2022/23 tax year.  From April 2023, National Insurance will revert back to its previous rate, and there will be a separate charge of 1.25% called the Health and Social Care Levy.

What does it all mean for SMEs? Well, so much of that relates to the overall state of the economy. Was this enough to spring start it given what’s been happening over the past year? You don’t need us to tell you at this stage as it’s too soon to tell what the answer will be, but we’ll keep you posted in our blogs, as always.

Your local AIMS Accountant would be delighted to discuss in detail any of the new measures and how it relates to your business. If you already have one, we encourage to get in touch with them to guide you further. To find your local AIMS Accountant, contact us today.