We know the budget can usually be a little too much information in a short space of time.
That’s why we always ensure we do a budget round up.
The essence of the budget was to create a ‘stronger economy for the British people’ with the ‘levelling-up’ agenda.
Four Fiscal Rules
In the opening statement Rishi announced the four fiscal rules he had focused on;
- Forecasts have been adjusted due to the fiscal situation in the UK being up to 6 times more sensitive than it was pre-pandemic.
- Working families will continue to receive help.
- Due to strong recovery, the UK can return to spending 0.7% of GDP on overseas aid by 2024.
- Spending is growing by 3.8% a year.
Freezing on the roads and not just for winter
There were several tax freezes announced but two specifically relating to vehicles and fuel;
– HGV Levy had been suspended until August 2022, this has now been extended to 2023. This means a freeze on Vehicle Excise Duty for Heavy Goods Vehicles.
– The fuel duty that was planned has been cancelled for at least five years.
The planned rise in duty on spirits, wine, cider, and beer has been cancelled.
The number of rates will drop from 15 to 6 with some stronger wines and high strength cider seeing a small increase in their rates.
Rates on many lower alcohol drinks including rose wine, fruit ciders, liquors, low strength beer and wine will fall.
Wages and taxation for individuals and businesses
As we already suspected, minimum wage is to increase to £9.50 from April 2021. This is an increase of 6.6%, for a full-time worker this is a pay rise of £1,070 a year in earnings before tax.
Universal credit taper rate will be cut by 8 percentage points from 63% to 55% and will be introduced no later than 1st December 2021, this means claimants can keep more of their payment.
Rates have been retained and reformed, with the planned increase on the multiplier not going ahead.
Meanwhile the £1m annual investment allowance will be extended to March 2023 instead of ending this December.
A 50% business rate discount will be put in place for companies in the retail, hospitalist and leisure sectors. This will last one year and will include establishments such as gyms, theatres, restaurants and hotels. The cap on this relief is £110,000.
Other areas to be invested in include housing and schools.
£24bn is to be earmarked for housing, of which £11.5bn is for 180,000 affordable homes.
A 4% levy will be placed on property developers with profits over £25m. The aim is to create a £5bn fund to remove unsafe cladding from buildings.
Furthermore, Rishi announces £640m a year to address rough sleeping and homelessness.
Schools are expected to receive an additional £4.7bn by 2025 including £2bn to help recovery from the pandemic.
This will see funding return to 2010 levels which means an increase of £1,500 per pupil.
There will also be a £300m ‘start for life’ parenting programme offered with an additional £170m by 2025 promised for childcare.
A statement was made around those who are lack numeracy skills and therefore a UK-wide numeracy programme will be set up to help improve basic math skills among adults.
Flights between airports in the UK will be subject to a lower Air Passenger Duty from April 2023 however at the same time a new ultra-long haul duty will be introduced for flights over 5,500 miles
Banks currently pay a surcharge of 8% on their profits which will be getting cut to 5% due to the increase in corporation tax.
There will be a scale up of the visa system to make it quicker and easier for businesses who are growing to bring in highly-skilled workers.
An extra £22.2bn is being set aside for courts and rehabilitation services with an additional £3.8bn being made available for the biggest prison-building programme in a generation.
If you or your business is likely to be impacted by the Autumn budget and you would like to talk to us please call us on 01482 888820.