On the 27th October, the Autumn Budget will be announced by Chancellor Rishi Sunak. Below are some predictions for what this could mean for small businesses.
- A ‘technical Budget’ that makes small changes to raise revenue
It is predicted that the Chancellor will make a series of small changes that will amount to ‘stealth’ tax changes.
One of these changes has already been announced ahead of the budget – the reform to basis periods for sole traders and partnerships is set for April 2024.
Meaning that profits will be calculated for the tax year instead of the accounting year.
- The outcome of the government’s spending review
It is expected that the Chancellor will announce the outcome of a spending review that will set UK government departments’ resource and capital budgets for 2022-23 to 2024.
Anticipate hearing how the government will do the following in the next three years:
- To invest in public services, across the NHS, education, the criminal justice system and housing
- To spread opportunity across the UK, improving struggling places by working with local leaders and strengthening the private sector wherever it is weak
- To lead the transition to net zero across the country and globally
- To help advance “Global Britain” and seize the “opportunities of EU exit”
- To develop “plans for an infrastructure and innovation revolution” and cement the UK as a “scientific superpower”
- Will fuel duty stay frozen?
It was announced in March by the Government that fuel duty will be frozen at 57.95p for another year, that is 11 consecutive years so far.
However it has been reported that Boris Johnson hasn’t ruled out a fuel duty rise for the upcoming announcement.
- More on the ‘Plan for Jobs’ extension
A £500 million Plan for Jobs extension to help people back into work has already been announced by the Chancellor.
It is to be noted that for small businesses the Kickstart Scheme will now last until March 2022, applications for this will close on 17 December 2021.
This scheme allows you to hire young people aged 16-24 and on Universal Credit for six-month work placements, funded by the government.
The £3,000 incentive for every apprentice you hire has also been extended until 31 January 2022.
The spending review on 27 October will confirm specific funding for each term.
- Will VAT be kept low for the hospitality and tourism sectors?
The temporary reduction to hospitality and tourism VAT ended 1 October, when it increased from five per cent to 12.5 per cent. It’s due to return to pre-pandemic 20 per cent in April 2022.
Due to the hospitality and tourism sectors having struggled especially due to the pandemic, there was a temporary reduction to the VAT, however this reduction ended on 1st October. Meaning it has increased from 5% to 12.5%.
It is due to return to the normal 20% rate in April 2022, however the industry is hoping to be able to push the government to keep it at 12.5% whilst it still recovers from the pandemic.
- Capital gains tax?
During the March Budget, the government froze the threshold at which you start paying capital gains tax at £12,570 until 2026. If there are any further changes to this it will be expected to be announced on 27 October.
- Further details on Help to Grow: Digital
The new Help to Grow scheme for businesses with employees was announced by the Government in March. This scheme aims to help businesses acquire new skills, reach more customers and to boost profits.
“Help to Grow : Digital” is the second part of the scheme which is due to launch this autumn. This will offer free advice on how technology can help your business grow, along with a discount of up to 50% on the costs of approved software (capped at £5,000).
To be eligible for the this you must have between 5 and 249 employees, be registered at Companies House and have been trading for 12 months. Further details of this will be revealed this autumn, and is expected to be released on 27th October.
The first part of the scheme “Help to Grow : Management” has already launched.
If you’re a small business and you have a question about the upcoming budget and how it will affect your business, please get in touch with us at firstname.lastname@example.org