There was a budget today apparently – but you may not have noticed, due to the lack of significant changes that will impact you, our clients, directly.
Much of the announcements centred around additional funding being allocated to public services which, I suppose, made a change from the theme of more recent announcements, with furlough, a word that many of the British people had probably never heard before, taking many of the previous headlines.
One change that may impact a handful of our clients is the announcement that business rates will be slashed by 50% for the retail, hospitality and leisure sector, an industry that was heavily affected at the height of the pandemic and will be a welcome break as these businesses continue to recover from the impacts this had on them. This is only on those who’s bill is under £110k per annum.
There will also be further reliefs for any business developing their premises from which they operate, with a ‘Business Rates Improvement Relief’. This means that if a business improves a property in such a way that increases its rateable value, the rise in rates will be deferred for 12 months.
The other major change to affect our clients as employers was the rise in the national living wage (the minimum wage for those aged 23 or over) which is up from £8.91 to £9.50 per hour. This, for a full-time employee, will result in a pay rise worth over £1,000 per year – good news for around 2 million of the UK’s lowest paid workers, but not such good news for employers with the additional NI and auto enrolment pension contributions to account for on top of the enforced increase.
For those businesses encouraged to invest in assets by the previous announcement of a ‘super deduction’, there was more good news on this front, as the annual investment allowance temporary maximum of £1m was extended to March 2023 instead of ending in December as was expected – falling in line with the end of the super deduction.
All in all, after much uncertainty around business over the last 18 months, it would appear Rishi Sunak has been conservative in his approach – cautious not to start to inevitably claw back the billions of pounds worth of support offered out to businesses in recent times, but also encouraging business to begin to stand on their own two feet again and ensure as the pandemic (hopefully) is drawing to a close, businesses ensure they are operating a sustainable model, are self-sufficient, and move forward without the recent safety net behind them.
