Editor | 28 October 2021
October 2021 Budget Highlights

October 2021 Budget Highlights

Yesterday the Chancellor of the Exchequer, Rishi Sunak announced the Autumn budget in the Commons. The budget put a huge focus on rises in Government spending across all Departments.

To save you time, we’ve picked out the elements that will affect you as a business owner. Learn what’s changing below.

Business rates

Next year’s planned increase will not go ahead. 

Businesses in the leisure and hospitality industry will benefit from a 50% discount in their business rates, in the 2022-2023 tax year.

From 2023 revaluation of business rates will change from every 5 years to every 3 years. 

Research and development

Cloud computing will now be considered eligible for R&D tax relief. The Chancellor also announced the R&D relief will only apply to UK activity from 2023. Full details are still to be announced.

National living wage

All age brackets will see an increase to the national living wage from next year. With the rate for 23-year-olds and older rising from £8.91 to £9.50 per hour.

Fuel duty

Cancellation of the fuel duty rise, as prices at the pumps still at record highs.

Online sales tax

This wasn’t included in yesterday’s budget, but the Government have confirmed they’ll be releasing the results of a consultation shortly. 

High street businesses are amongst those calling for a tax on online retailers after recent years have seen a huge shift in the way people shop.

Corporation tax 

The Spring 2021 budget announced corporation tax will rise to 25% in 2023. 

However, businesses with less than £50,000 in profits will continue to pay the 19% rate. 

There will also be relief for business with profits between £50,000-£250,000, so they’re unlikely to have to pay the full 25% rate. 

National Insurance increase

April 2022 will see an increase in NI contributions for employers, employees and the self-employed.

The increase of 1.25% will mean higher contributions from all those who earn over the minimum thresholds.

National Insurance contributions will return to their current rates in April 2023. The additional 1.25% deduction will remain, and be renamed ‘Health and Social Care Levy’.

Dividend tax increase

An increase of 1.25% will apply from April 2022.  You’ll still get a tax-free allowance of £2,000 annually, but the tax rates after that will increase. The basic rate on dividends increases from 7.5% to 8.75% on total income up to £37,700. And the new rate of dividends tax on total income £37,701-£150,000 will be 33.75%.

No update on income tax thresholds

Read the full budget