Last week, the Chancellor of the Exchequer – Rishi Sunak – announced a wave of tax reforms in the 2021 Autumn Budget.
Whilst many of the proposals have the biggest impact on an individual level, there were some key points that will impact business owners, too:
💰 There’s an extension to the annual investment allowance – it’ll now remain at £1 million until March 2023 instead of returning back to £200,000 at the end of this tax year. This ultimately means that businesses can expand their operations without increasing their tax liabilities in the short term and hopefully will encourage growth from domestic companies. If you can afford it, this is an optimal time to upgrade and expand your business!
“Remember the annual investment allowance only covers businesses investing in plant and machinery, computer systems, and certain fixtures and fittings. By your company investing in upgrades and new equipment, your business will be liable for less overall tax at the end of year – please feel free to get in touch with one of the team here at Gravitate Accounting”
💁♂️ For one of the hardest impacted industries during the pandemic, there’s a 50 percent discount in business rates for those in hospitality, along with a simplification of the duty on alcohol. This time, sparkling wine wins and red wine loses 🍷 It appears to favour domestic produces of alcoholic beverages.
“By overhauling the duty system, the government has gone for a common sensed approach with the higher the percentage of alcohol in beverages, the higher the duty paid.”
🚗 The planned increase in fuel duty has also been scrapped. With fuel prices hitting an 8 year high and supply chains disrupted by a lack of HGV drivers, this is a welcomed announcement for anyone who hasn’t taken the tax incentives with electric cars yet.
“Company cars became unaffordable for directors several years ago as the Government looked to tax petrol and diesel cars excessively. Company cars are now a hot-topic again after the introduction of low benefit in kind rates for electric vehicles. It can be highly tax efficient to put a electric vehicle through your company.”
👥 National Living Wage increases by 6.6% to £9.50 an hour from next year. Inevitably this will result in an increase in staffing costs – primarily in the retail and hospitality sectors – and the cost is compounded by the increase in National Insurance Contributions that have previously been announced.
“This is a welcomed announcement for workers in the lowest paid roles in society and with employment costs being a fully tax-deductible expense, the increase in overall costs will be partially offset by a saving in corporation tax.”
✈️ Domestic flights will attract a lower rate of air passenger duty from April 2023.
“This is an interesting move by the Treasury, with Glasgow hosting the United Nations Climate Change Conference this week, offering an incentive for domestic air travel whilst reviewing grants on electric vehicles seems short sighted, however it will be a welcomed announcement for those in the air travel industry who have been disproportionately impacted by the COVID-19 pandemic.”
The latest tax changes will inevitably impact your business – we can help you forecast the implications of the announcements and help you make the most of the latest tax changes so that your business is always ahead of the competition.
We automate time consuming tasks, consult on best practices and take advantage of all the benefits of digital finance.
📞 Just give us a call – 0114 321 7459
As a business owner, you know that having the right people on your team is essential.Read Article
As a business owner, you know that there is always something to do.Read Article
As a small business owner, you know how important it is to have a finance function that is fit for purpose.Read Article
Selling a business is an exciting time, but it’s also one of the most complex and challenging processes that many small and medium-sizedRead Article
If you’re an SME owner, you may have heard about Making Tax Digital (MTD) and wondered what it means for your business.Read Article
Is your finance function still stuck in the dark ages? Do you find yourself drowning in paperwork and manual processes?Read Article
Sheffield is one of the best places to start a business in the UK.Read Article
Running a business can be demanding, and keeping up with the finances is no exception.Read Article