The Autumn Budget occurred on Wednesday 27th October 2021, and we have to admit, it was a rather underwhelming for small businesses and the self-employed. Most of Chancellor Rishi Sunak’s announcements weren’t specifically related to those working for themselves. However, there were a few interesting statements made, and it’s also important to note what hasn’t changed from the Budget back in March.
Join us as we dissect the most relevant points and detail all the facts you need to know.
The post-COVID economy
Inflation was at 3.1% in September, and it’s likely this will increase to a rate of 4% on average over the next year – as predicted by the Office for Budget Responsibility (OBR).
It’s expected that the economy will bounce back to pre-COVID levels at the turn of the year, which is earlier than originally thought. Previously, this year’s growth was estimated at 4%. But now, the OBR is forecasting 6.5% growth for 2021, followed by 6% in 2022, 2.1% in 2023, 1.3% in 2024, and 1.6% in 2025.
What’s more, their long-term ‘scarring assumption’ from COVID has been reduced from 3% to 2%.
Business rates and taxes
Outside of the state of the economy, business rates will be retained and reformed. This includes a fresh 12-month relief so companies can invest in their premises.
As fuel prices are currently at their highest level in eight years, the planned rise for fuel duty will also be cancelled. In turn, travel costs for the self-employed will be reduced. Not only that, regions like Greater Manchester, West Midlands and South Yorkshire will receive funding to support London-style transport developments.
What remains unchanged
That being said, a number of things weren’t touched upon – and this is because they’re staying the same. Personal allowance will be kept at £12,570, and the higher-rate tax threshold at £50,270, with both being frozen from April 2022 until 2026.
Likewise, the rise in Corporation Tax is still due to go ahead – growing from 19% to 25% in April 2023, for businesses achieving a profit of at least £50,000.
There was no change to Capital Gains Tax either, which was welcome news to many who feared the government could potentially increase this. In addition, the 1.25% rise to divided tax rates from April 2022 will also remain in play. The basic rate will now be 8.75%, with the higher rate at 33.75%, and additional rate at 39.35%.
Support from Bright Ideas Accountancy
Whilst it wasn’t a budget aimed at the self-employed, some of the announcements still impact small businesses and those working for themselves. So, if you need help or advice relating to the budget, or a little support with the figures, then turn to Bright Ideas Accountancy.
Whether it’s guidance on financial planning, support with VAT returns and bookkeeping, or even assistance with compliance, you can rely on our years of expertise and experience.
