Autumn Budget 2021: the lowdown for small businesses

Chancellor Rishi Sunak presented the 2021 Autumn Budget yesterday, setting out a new series of financial initiatives and updates that will affect the UK economy. Here's what the announcements mean for your small business clients.

Recovery Loan Scheme extended

The Recovery Loan Scheme, one of the financial measures introduced by the government in response to the Covid-19 pandemic, will be extended until 30th June 2022. Additional changes to the scheme, which had been due to close on 31st December 2021, will be introduced on 1st January 2022. These changes will affect who is eligible to use the scheme, the maximum amount of finance available and the guarantee coverage that the government will provide to lenders. 

£1m level of Annual Investment Allowance extended

The Chancellor revealed that the temporary £1 million upper limit for the Annual Investment Allowance, which had been due to end on 1st January 2021, will remain in place until March 2023. 

Basis period reforms confirmed

The Chancellor confirmed that the planned basis period reforms, which will tax all unincorporated businesses on their profits for the tax year, regardless of their accounting year end, will be implemented on 6th April 2024. A transition for the reforms is planned in the 2023/24 tax year.

Business rate reforms revealed

From April 2022, a 50% discount in business rates of up to £110,000 will apply to retail, hospitality and leisure businesses in England for a year. This will follow the current 66% discount, which is capped at £2 million and due to end on 31st March 2022.

More broadly, the Chancellor announced that a 100% improvement relief for business rates will be introduced in 2023. The relief will be reviewed in 2028, and from 2023, business rates will be reviewed every three years. 

Additional R&D tax relief announced

Research and Development (R&D) tax relief will be made available for a wider range of business costs, including cloud computing and data. The Chancellor also revealed that from April 2023, more R&D tax relief will be available for UK projects.

Capital Gains Tax window extended

From today, clients who sell a UK residential property will have an extended window of 60 days after the sale’s completion date in which to report and pay Capital Gains Tax.

You can read the Autumn Budget 2021 in full on the government’s website.