The Key Autumn 2021 Budget Announcements for Businesses

Business Asset Disposal Relief was untouched and Business Rates were discounted for the sectors hardest hit by Covid-19

The Autumn Budget 2021 largely focused on increased Government investment to back further economic growth in the post Covid-19 economy. Corporation tax increases and the health and social care levy had already been announced weeks ago, whilst most of the spending plans trailed in the media, so when it came to it, there won’t be too many headline grabbing announcements. In this article we look at 3 key announcements (one of which was a non-announcement) which will have an effect on business, especially some key business sectors, as the recovery from Covid-19 gets under way.

Business Asset Disposal Relief left untouched

We are pleased to report that the Chancellor has not touched Business Asset Disposal Relief (formerly known as Entrepreneurs Relief), so the benefit remains with a £1m limit and a reduced tax rate of 10%. This is especially good news for those business owners/directors wishing to close their solvent businesses down through a Members Voluntary Liquidation.

However, we feel that further reductions to BADR, or indeed a full cancellation still remains on the Treasury’s radar for future budgets, given the huge public debt that the Pandemic has left us with. At some stage the Government will surely wish to reduce this and BADR remains an easy target. Watch this space.

Business Rates and the National Living Wage

We welcome the temporary business rates reliefs that were announced for 2022/23, specifically:

After 18 months, in some cases, of little or no trading in these sectors (through no fault of their own), many businesses remain in distress. For some, despite the full relaxation of Covid-19 restrictions in England since July, they are still nowhere near their pre-pandemic trading figures, with little prospect of being able to make up the lost revenue. The 50% discount in business rates will help.

The concern, however, is that that this relief will be wiped out by the National Insurance Contributions’ increase through the Health & Social Care Levy, and by the increases to the National Living and National Minimum wage thresholds.

The NMW and NLW increases will have the biggest impact on those sectors who rely on large numbers of low paid employees, namely hospitality and leisure, retail (and also agriculture). These are the industries which were hardest hit by both the impact of COVID-19 and the reduction in available overseas labour post-Brexit. These industries, in particular, still remain vulnerable, therefore.

Talk to us if your business is in financial difficulty

Our advice is that if you know that the underlying position of your company is weak, then act now! The sooner you get in touch with an Insolvency Practitioner, such as Antony Batty & Company, the sooner we can recommend a solution. We will talk you through all the options available, so that you know exactly where you are, helping you to make the best possible decisions. The first discussion is free.

In the meantime, if you need our help and advice in any of our specialist insolvency areas, please contact us or call any of our offices, below, for a FREE initial discussion on the ‘phone or over a coffee.

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