Tax News
January 9, 2022
3 Minutes

Find out how the Autumn Budget 2021 announcements will impact your business

Jonathan Carr
Client FD

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!

Jonathan Carr

“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.

Jonathan Carr:

“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.

Sam Newton

“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.

Jonathan Carr:

“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.

Jonathan Carr:

“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

Jonathan Carr

Subscribe to Gravitate

Get industry insights that you won't delete, straight in your inbox.
We use contact information you provide to us to contact you about our relevant content, products, and services. You may unsubscribe from these communications at any time.

More news

6 Essential Questions to Ask When Hiring an Accountant for Your Business

Finding the right accountant to manage your finances is key to success! Click to read so you know what to ask when searching.

Read Article

Tax Benefits of Employing Family Members Through a Limited Company

If your partner or children are legally eligible to work, this strategy can offer substantial advantages for your business!

Read Article

The Business Owners Guide To Electric Cars

Find out how navigating the transition to electric vehicles and how to optimise it!

Read Article

What Expenses Can I Put Through My Business? 

This blog explains why you should put expenses through your business and what counts as a business expense.

Read Article

Strategies to Boost Employee Morale Without Tax Implications

For this blog, we're shining the spotlight to employees and exploring avenues to provide meaningful rewards that don't add extra tax weight.

Read Article

The Financial Advantage of Leasing Electric Cars Through Your Limited Company

Electric vehicles (EVs) have surged in popularity, driven not only by environmental consciousness but also by financial incentives.

Read Article

Maximising Tax Efficiency: Varying Your Income for Better Returns

When it comes to managing your income, understanding the potential tax benefits can significantly impact your overall net cash in hand.

Read Article

Maximising Earnings: Salary vs. Dividends for £150k Income

In our ongoing series exploring various income levels, we've already delved into the financial strategies for those earning £50k and £100k.

Read Article