Today, Chancellor Rishi Sunak unveiled the Autumn Budget 2021 along with his latest Spending Review.
That was theory, at least. However, in recent days, government unveiled much of what the Budget now contains – much to the fury of House of Commons Speaker Lindsay Hoyle and drawing a wry comment from Deputy Speaker Eleanor Laing, who told Sunak she looked forward to “the remainder of your announcements”.
To help THP clients, we watched the Chancellor outline the Autumn Budget 2021 and have summarised the key announcements; and particularly those that will affect both individuals and businesses.
Autumn Budget 2021: a summary
Sunak introduced the Budget saying he had made four judgements.
- Meeting the government’s fiscal rules with a margin ‘to protect ourselves from economic risks’
- Supporting working families
- Restoring international aid spending to 0.7% when forecasts are met, currently likely to be by the end of this parliament.
- Increasing departmental spending.
From a business point of view, the most important announcements concerned business rates. These will now be revalued every three years from 2023. There will also be a one-year, 50% discount for businesses in the retail, hospitality and leisure industries, plus other new exemptions and reliefs (see below).
From a headlines point of view, the most important announcements concerned a radical overhaul of the alcohol duty system. The main duty rates are being cut from 15 levels to 6. Drinks with a higher alcohol content will pay more duty. Some lower alcohol drinks, such as rosé wine will see duty fall. Sparking wine will now attract the same duty as non-sparkling wine. The duty on drinks made with fruit – such as cider – will go down, as will the duty on draught drinks. Finally, the increase in duty on spirits will be cancelled.
From a political point of view, the sign-off announcement concerned Universal Credit. The taper rate has been dropped from 63p to 55p, allowing claimants to keep more of their earnings.
There were many other announcements. Many had been trailed in advance but others had not. Below are the ones we managed to capture as the Budget was being delivered.
For ease of reference we’ve grouped the Budget announcements under the following headings:
- Education and skills (relevant to the workplace)
- Business rates to be revalued every 3 years from 2023
- A one-year Business Rates discount of 50% for businesses in the retail, hospitality and leisure industries
- Until 2035, plant and machinery used onsite for renewable energy exempt from business rates
- A business rates improvement relief – from 2023, every business will be able to make property improvements and for 12 months, pay no extra rates
- £1.6 billion in grants for ‘internationally mobile’ companies to invest in UK infrastructure. This will include money for resilience planning for future pandemics, plus funds for electric vehicle production in the north of England
- A ‘Global Talent Network’ to attract high-skilled workers to the country
- A change to ‘Tonnage Tax’ to encourage shipping companies to adopt the UK flag, the red ensign
- R&D spending to increase to £20 billion a year by the end of this parliament. R&D tax relief rules to change so that they apply only to investment in the UK
- £1.4 billion British investment fund to promote inward investment.
- A National Living Wage rise: from £8.91 per hour to £9.50 per hour for people aged 23 or over
- Tax relief for theatres doubled until 2023
- Fuel duty frozen – planned rise cancelled
- No VAT cut for household energy bills
4. Education and skills
- Skills spending to increase 26% over this parliament
- £1.6 billion over three years to roll out T-levels for 16 to 19-year-olds.
- £550 million for adult skills
- £24bn will be for “a multi-year housing settlement”, including £11.5 billion to build up to 180,000 new homes
- £1.8 billion for building new homes on brownfield sites in England
- A 4% levy on developers with profits of more than £25m, to help fund the removal of unsafe cladding.
- A cut to the Universal Credit Taper Rate from 63% to 55%. Work allowances increased by £500 per year
- £6.9 billion for train, tram, bus and cycle projects
- Vehicle Excise Duty for HGVs frozen
- HGV Levy suspension extended until August 2022
- £150 billion extra spending across all government departments
- Capital health spending to increase by £4.2 million in cash terms over this parliament
- £9.6 billion for COVID-19 health spending
- An extra £200m investment in the Supporting Families programme
- 100 local projects to benefit from £1.7 billion of funding from the Levelling Up Fund
- £6.1 billion to support more green transport options
- Lower rate of Air Passenger Duty on domestic flights. A new, higher-rate ‘long-haul’ band for flights of 5,500 miles or more
- Alcohol duties simplified.
About Ben Locker
Ben Locker is a copywriter who specialises in business-to-business marketing, writing about everything from software and accountancy to construction and power tools. He co-founded the Professional Copywriters’ Network, the UK’s association for commercial writers, and is named in Direct Marketing Association research as ‘one of the copywriters who copywriters rate’.