Rishi Sunak announced his third Budget as Chancellor of Exchequer to Parliament on Wednesday, 27th October 2021. It is a fiscal approach designed to prepare the UK for an “age of optimism” in the post-Covid-19 economy.
The Office for Budget Responsibility confirmed that economic growth in 2021 had been revised up from 4% to 6.5%, with the economy set to grow a further 6% in 2022. Meanwhile nationwide unemployment levels are set to peak at just 5.2%.
The key announcements in Budget 2021 relative to the UK’s army of small businesses and the self-employed:
- National Insurance Contributions set to increase from April 2022.
- Dividend tax will increase by 1.25% from April 2022.
- The Chancellor announced changes to research and development tax credit relief from April 2023 to refocus the relief on to UK based businesses.
- The National Living Wage will rise on 1st April 2022 by 6.6% to £9.50 an hour.
- The Government announced the temporary AIA limit of £1million of expenditure on qualifying plant and machinery, which was due to end on 31st December 2021, has been extended to 31 March 2023.
- The Recovery Loan Scheme made available to businesses planning their way out of the Covid-19 lockdowns would be extended until 30th June 2022.
- Fuel duty rise scrapped for 2022/2023.
- Making Tax Digital for income tax will now be introduced from 6th April 2024.
- From 27th October 2021, the deadline to report and pay CGT after selling UK residential property will increase from 30 days after the completion date to 60 days.
- The Government has announced future changes to ‘Net Pay’ pension scheme arrangements which will mean that low earners will benefit from a top-up to their pension.