Chancellor of the Exchequer, Rishi Sunak, announced his Autumn 2021 budget this week, paving the way for the economy for the next six months. We take a look at some of the key takeaways from the announcement and what they mean for businesses.
50% cut of business rates & freezing of business rates multiplier
Businesses within the leisure, hospitality and retail sectors will be grateful for the decision to relieve business rates by 50% (up to £110k). The reduction will kick in during the next financial year (2022-2023) and provide a welcome breather for businesses still trying to recover from closures during the pandemic. The move will contribute to a saving of over £1.7 billion for eligible businesses. The business rates multiplier has also been frozen for 2022-2023, which is estimated to save businesses over £4.6 million in the next five years.
Business rates relief for property improvements
Businesses who invest in their premises will be eligible for relief on business rates in a new initiative announced by Sunak this week. Though not due to start until 2023, the relief will be available for businesses who are looking to make improvements to their premises. “Expansions, air conditioning, CCTV, and bike sheds” were examples given by Sunak.
Business rates relief for green technology investments
In addition to the business relates relief for investing in their properties, businesses will also be able to access a business rates relief for investing in green technology. The initiative is set to include relief on investment in technologies such as solar panels and heat pumps
Recovery loan extension
The Recovery Loan Scheme, introduced in April this year to provide businesses with access to funding has been extended for a further six months. The scheme, due to come to an end on 31st December 2021 was put in place to provide an 80% backed government loan to businesses affected by the pandemic, and replaced the Bounce Back Loan Scheme and the Coronavirus Business Interruption Loan Scheme. The scheme gives businesses an opportunity to take out a loan of up to £2 million, but the scheme will change and loans will now be backed by the government for 70% of the funds.
Minimum wage increases
The National Living Wage and National Minimum Wage will both see increases from 1st April 2022. Workers over 23 years old will see the National Living Wage increase from £8.91 to £9.50. The Nationa Minimum Wage will be increasing for workers aged 21-22 from £8.36 to £9.18. And apprentices will also see the benefits when their wages are increased from £4.30 to £4.81.
20% VAT rate returns
As originally planned, the Chancellor announced that the return to a VAT rate of 20%. Pressure was being put on the government to keep the reduction of VAT after it was introduced to help businesses in hospitality and tourism recover after the lockdowns of 2020/2021, but Sunak has confirmed that the return of VAT at 20% will go ahead as planned in April 2022.
Sean Husband, director of My Debt Recovery said, “Overall, the Autumn budget it is a fairly positive outlook for businesses, with the reduction of business rates and the recovery loan extension on the cards. There is no doubt that it has been a tough couple of years for businesses and the widespread of late payments is a testament to that. We hope these initiatives, particularly the business rates relief, from the budget will help businesses to refocus their finances and prioritise clearing late payments.”.
If your business is feeling the strain of late payments then now is the time to reach out. Our team can help you to recover monies owed to your business on a no collection, no fee basis. We’ll step in as an independent third party and help with negotiations and other processes to collect the debts owed to your business and enable you to focus your time and energy on running your business. Contact our team today here.