The new Autumn 2021 budget update contains important key information for small businesses, sole traders, and employers. In this article we look at what changes have been made, so that your business can stay up to date with the latest ongoings.
New Health & Social Care Levy
This was first announced only in September 2021, the government have looked to reform the health and social care sectors. To fund this, it will come in the form of a 1.25% increase in Class 1 (Employee and Employer), and Class 4 National Insurance Contributions. This increase is only temporary and does not start until April 2022. Through introducing the Health and Social Care Levy there has subsequently been an increase to dividend tax rates.
The National Living and National Minimum Wage
Leading on from this, more news has come out from the Chancellor’s official budget update about the National Living and Minimum Wage. Firstly, the National Living Wage only applies to those workers who are aged 23 or older. From April 2022 they will receive a pay increase from £8.91 to £9.50. The National Minimum Wage is slightly more complex as it depends on the age of the worker. Apprentices will earn a minimum of £4.81, 16–17-year-olds also £4.81. The age range of 18-20 must now receive at least £6.83 per hour, and finally 21–22-year-olds will be paid a minimum £9.18.
The Annual Investment Allowance
The AIA will allow you to make a claim of the maximum cost of qualifying assets. The allowance allowed yearly is capped at £200,000, however this was temporarily increase to £1 million due to the ongoing COVID economic recovery plan. This was expected to return to its normal figure in December 2021, however it has now been decided that it will stay in place until 31st March 2023.
Changing Business Rates
With many of the emergency support measures for hospitality and leisure industries shutting down due to the pandemic, it has been announced that there in now alternate support. This includes changes on business rates, mostly for business in the sectors stated previously. It’s important to note this is only for England as Scotland, Wales and Northern Ireland will set their own rates.
- Business rates relief of 50% for retail, hospitality, and leisure properties in 2022/23. THIS IS CAPPED AT £110,000.
- Occupiers can get a 100% relief on business rates which will increase its rateable value. This launches in 2023 and will be reviewed no earlier than 2028.
- They are now pushing business to invest into making environmental changes, this means there will now be a 100% business rate exemption for onsite renewable energy generation as well as eligible heat networks.
Alcohol Duty Changes
This is set out to make the existing tax bandings that affect taxation on alcohol simpler. The new system is relatively straight forward, it will result in stronger drinks having a higher rate. Four bands have been outlined, however the information on what rate will apply for each is not available yet.
- 2% – 3.4%
- 5% – 8.4%
- 5% – 22%
- 22% and above
Here at AWOC we know how hard running a business can be. Get in touch today at https://www.awocaccounting.co.uk/.
FOLLOW US ON SOCIAL MEDIA
FOR NEWS UPDATES AND TIPS!
